Oh my goodness. Came across these videos today, as need to file my company accounts. Needed advice on all the terminology within the Balance Sheet. This is an absolute gem! Going to work my way through lots of your other videos now re being self employed, as so much to learn! Huge thanks.
Great video! How would a larger director's loan account be represented in the Total Capital and Reserves section if the amount was greater than the year earnings, and therefore making the total amount negative - for example if director's loan was 10,000 instead of 1500?
I guess the short answer would be it wouldn't directly, the loan (presuming company owes you the money) would sit in the liabilities section. The result of what you did with the money you put in would have more off an effect on the reserves. Hard to explain, its a bit abstract concept to explain in text this one!
cleared a lot of stuff thanks. one thing confused about is the selected balance sheet date, do we show the figure before that or everything up to the current time. foe example show only show the tools/shares we bought before the date or every that we have at the date of submitting
Thanks for video, makes more sense now. If I'm a sole trader do I carry forward any retained earnings to the following year or do I just balance it off with drawings?
Depends how your software is set up. Often with a sole trader you tend to do an opening / closing ‘journal’ where you take last years drawing on the first day of the new year and write them against retained earnings (usually debit retaining earnings credit drawings). Difficult one to explain in a comment.
Thank you for this! One thing that I get confused with is when you see something like "Net Liabilities: (500,000)". My understanding is the brackets mean it's a negative number if a Liability is already a negative isn't it? Or does that mean in this example they're actually 500,000 in profit because it's a negative liability?!
It actually depends on the format of the accounts. If you saw a liability in say a balance sheet printed from Xero or Quickbooks that was a minus figure, its likely the wrong way round as it were, so it's actually an asset. If you see it in a minus in a formal set of accounts it depends on the format they use, sometimes liabilities/'credit' figures can be shown with brackets like that.
On my Companies House Balance Sheet it had fields labelled like 'Net current assets (liabilities)'. This one for me came out as '-82'. Then on the next page it showed as '(82)'. Took me a while to reason that the bracketed part must mean a negative amount and the minus sign was not disappearing to nowhere.
Fantastic, so simple - Thank you ! Question please: Is it ok from a tax perspective for a company to reimburse the director for expenses later than after one year ? Empooyee / director reimbursements are a „current liability” (usually due within 1 year) and loans are „long-term liability” but what if the co hasn’t got the money yet to refund the director - is it ok to repay them whenever the co eventually starts making profit (in the case of a sole director ltd co) ? Putting those expenses through as a reimbursement just makes things simpler to track for the future but perhaps those expenses should be marked differently in the accounting software when one knows they won’t be repayed within one year… ? Thank You !
Hard to say without knowledge of the specifics, but in general it would be good to capture the expenses in the records, in the year they are incurred, even if not repaid until funds available (which is generally fine).
@@HeelanAssociates Thanks very much 🙏 Would you say along the same lines that a yearly subscription fee should also be divided into monthly chunks when recording it in an accounting software or is it ok to put it down as once a year-expense ?
As a sole trader it doesn't really matter. You get the tax offset on the expenses you use the money to buy, presuming they are tax deductible. The money in / out isn't an issue to deal with like with a LTD. Hope that helps.
Hi, Great video. I purchased a course for my ltd companies use when first started setting up with own money as directors loan to company for a few thousand and also put a few thousand in my business bank account again as directors loan. I have not yet traded however I believe that these would count as significant transactions and therefore I need to file micro accounts and cannot file dormant ones? Also the course cannot be resold but still has value as resource, information etc... is it counted as an intangible asset or fixed asset? i.e. would you enter it in fixed asset section on micro accounts for companies house and if so how do handle depreciation for something that cannot be resold but has different kind of value would you simply fill in what was paid for it or put 0 if it cannot be resold or something else? thank you
Hi Ben, Probably too much to handle in a comment here, but some comments: *Yes not dormant *Course depends on what it was, could simply be a training expense. Could also be not tax deductible at all; all in the detail. *Depreciation of the assets is a longer answer, depending on if/what/'economic life'. I could give you the text book speel, but its not gonna help without the accounting background knowledge. If you are still wrestling with this, we have some services that can get this all sorted for you, so don't hesitate to get in touch with the team.
Hello there, I have a question. How do we adjust the pension expense that we pay for our director every month from our income so that he can have that money when he will be retired? How do I consider that money in the Balance sheet because I believe that's going to be our Asset that we are going to use in some years' time? Appreciate in advance for your valuable answer. Thanks
@@HeelanAssociates Yes, it is a third-party scheme called SJP. So what should be the provision for this in the balance sheet? Is it going to come in profit & loss as an expense or is it going to come in the balance sheet as a current asset? Appreciate your response.
I'm a bit confused where it says 'Net current (liabilities) - 11,400' and 'Total assets less current liabilities' could you explain a bit further please
Oh my goodness. Came across these videos today, as need to file my company accounts. Needed advice on all the terminology within the Balance Sheet. This is an absolute gem! Going to work my way through lots of your other videos now re being self employed, as so much to learn! Huge thanks.
Glad they helped Anna!
Same, this really helped me with my Balance Sheet for Companies House.
Great video, can you give example of how we can incorporate this into a weekly practice please
Will add this to the vid list :- )
Great video and explanation. Thanks
Glad you enjoyed! As Dan is a fellow vegan he enjoyed a glance at your channel!
@@HeelanAssociates Dan is also my name. Vegan Dan's > *
Hi there,great videos! I wish I’d seen some off them earlier in business! Is it possible to do a video on a trial balance sheet? Thanks
Any specific part / query?
Great video!
How would a larger director's loan account be represented in the Total Capital and Reserves section if the amount was greater than the year earnings, and therefore making the total amount negative - for example if director's loan was 10,000 instead of 1500?
I guess the short answer would be it wouldn't directly, the loan (presuming company owes you the money) would sit in the liabilities section. The result of what you did with the money you put in would have more off an effect on the reserves.
Hard to explain, its a bit abstract concept to explain in text this one!
cleared a lot of stuff thanks. one thing confused about is the selected balance sheet date, do we show the figure before that or everything up to the current time. foe example show only show the tools/shares we bought before the date or every that we have at the date of submitting
Its effectively a snap shot at the date of the report. So its the status at that date.
Thanks for video, makes more sense now. If I'm a sole trader do I carry forward any retained earnings to the following year or do I just balance it off with drawings?
Depends how your software is set up. Often with a sole trader you tend to do an opening / closing ‘journal’ where you take last years drawing on the first day of the new year and write them against retained earnings (usually debit retaining earnings credit drawings). Difficult one to explain in a comment.
Thank you for this! One thing that I get confused with is when you see something like "Net Liabilities: (500,000)". My understanding is the brackets mean it's a negative number if a Liability is already a negative isn't it? Or does that mean in this example they're actually 500,000 in profit because it's a negative liability?!
It actually depends on the format of the accounts. If you saw a liability in say a balance sheet printed from Xero or Quickbooks that was a minus figure, its likely the wrong way round as it were, so it's actually an asset.
If you see it in a minus in a formal set of accounts it depends on the format they use, sometimes liabilities/'credit' figures can be shown with brackets like that.
On my Companies House Balance Sheet it had fields labelled like 'Net current assets (liabilities)'. This one for me came out as '-82'. Then on the next page it showed as '(82)'. Took me a while to reason that the bracketed part must mean a negative amount and the minus sign was not disappearing to nowhere.
Fantastic, so simple - Thank you !
Question please: Is it ok from a tax perspective for a company to reimburse the director for expenses later than after one year ?
Empooyee / director reimbursements are a „current liability” (usually due within 1 year) and loans are „long-term liability” but what if the co hasn’t got the money yet to refund the director - is it ok to repay them whenever the co eventually starts making profit (in the case of a sole director ltd co) ?
Putting those expenses through as a reimbursement just makes things simpler to track for the future but perhaps those expenses should be marked differently in the accounting software when one knows they won’t be repayed within one year… ?
Thank You !
Hard to say without knowledge of the specifics, but in general it would be good to capture the expenses in the records, in the year they are incurred, even if not repaid until funds available (which is generally fine).
@@HeelanAssociates Thanks very much 🙏 Would you say along the same lines that a yearly subscription fee should also be divided into monthly chunks when recording it in an accounting software or is it ok to put it down as once a year-expense ?
Just one quick question, as a start up sole trader, I would need some working capital. Can I loan money to myself and then repay it as a tax offset?
As a sole trader it doesn't really matter. You get the tax offset on the expenses you use the money to buy, presuming they are tax deductible.
The money in / out isn't an issue to deal with like with a LTD. Hope that helps.
Should my current assets align with my incomings on the P&L if I have no other liabilities / debts / money due?
Hard to say without connext but I guess if you ‘spent’ or ‘saved’ all that money in on/as current assets it could be.
Hi, Great video. I purchased a course for my ltd companies use when first started setting up with own money as directors loan to company for a few thousand and also put a few thousand in my business bank account again as directors loan.
I have not yet traded however I believe that these would count as significant transactions and therefore I need to file micro accounts and cannot file dormant ones?
Also the course cannot be resold but still has value as resource, information etc... is it counted as an intangible asset or fixed asset? i.e. would you enter it in fixed asset section on micro accounts for companies house and if so how do handle depreciation for something that cannot be resold but has different kind of value would you simply fill in what was paid for it or put 0 if it cannot be resold or something else?
thank you
Hi Ben,
Probably too much to handle in a comment here, but some comments:
*Yes not dormant
*Course depends on what it was, could simply be a training expense. Could also be not tax deductible at all; all in the detail.
*Depreciation of the assets is a longer answer, depending on if/what/'economic life'. I could give you the text book speel, but its not gonna help without the accounting background knowledge.
If you are still wrestling with this, we have some services that can get this all sorted for you, so don't hesitate to get in touch with the team.
Hello there, I have a question. How do we adjust the pension expense that we pay for our director every month from our income so that he can have that money when he will be retired? How do I consider that money in the Balance sheet because I believe that's going to be our Asset that we are going to use in some years' time? Appreciate in advance for your valuable answer. Thanks
Usually you are paying into a managed pension scheme provided by a 3rd party (NEST, royal London etc). Is this the case for you?
@@HeelanAssociates Yes, it is a third-party scheme called SJP. So what should be the provision for this in the balance sheet? Is it going to come in profit & loss as an expense or is it going to come in the balance sheet as a current asset? Appreciate your response.
@Heelan Associates need your assistance on this
Hi Is it possible for you to share this spreadsheet?
We will look into it!
I'm a bit confused where it says 'Net current (liabilities) - 11,400' and 'Total assets less current liabilities' could you explain a bit further please
Sure its current assets (22,000) less current liabilities (£10,600) = 11,400
Good evening help me
We can try
You referred to an asset as a ‘thing that you owe’ - surely this is misleading?
Do you have a time stamp?
@@HeelanAssociates hi there - 1:25 (I even confirmed it on the subtitles).
Guessing he means to say "own" than "owe"