When a major customer collapses just weeks after your year end, the real question is not when they failed but whether warning signs existed before your balance sheet date. This article explains how adjusting and non-adjusting events under FRS 102 and IAS 10 determine whether you rewrite your December figures or simply disclose the risk, with a full worked example and journal entry.
That £80,000 stock figure on your balance sheet might be fiction. Accounting rules require inventory to be valued at the lower of cost and net realisable value, meaning obsolete, recalled, or slow-moving stock may need writing down — turning a healthy-looking warehouse into a £62,000 reality check before your accounts are finalised.
A £40,000 roof replacement can look like a simple repair bill, but IAS 16 often says otherwise. This article walks through component accounting, derecognition, and the worked journal entries SME owners need to get property, plant and equipment right — plus why the UK tax treatment can differ entirely from the accounting one.
Before approving a £120,000 CNC machine purchase, one number matters more than the sales pitch: the discount rate. This guide walks through calculating Weighted Average Cost of Capital (WACC) using a real SME example, showing how blending the cost of debt and equity reveals whether an investment truly creates value or quietly destroys it.
Profits above £50,000 do not trigger an automatic 25% corporation tax rate. A mechanism called marginal relief smooths the transition up to £250,000, and this article breaks down the formula, a full worked example, and the accounting journal entry so you can check your own figures and avoid over-provisioning.
Late payments can quietly wreck an otherwise profitable SME's cash flow, often weeks before an invoice ever shows up on an aged debtors report. This article explains how AI-powered credit control tools turn historical payment patterns, invoice data and external signals into forward-looking risk scores — and walks through a worked example showing exactly how early intervention protects working capital.
Most SME owners understand their profit and loss account and balance sheet, but the Statement of Changes in Equity often goes unread. It reconciles exactly why shareholders' funds moved — through profit, dividends, share issues, or revaluations — and misunderstanding it can lead to illegal dividends, bad lending decisions, or a false sense of business health.
A warehouse bought for £400,000 in 2015 can sit on the books at £300,000 while an estate agent values it at £650,000 — and both figures are correct. This article unpacks the difference between historical cost and fair value accounting, why UK SME balance sheets rarely reflect true market worth, and the specific moments — selling up, borrowing, insuring — when you need a real valuation instead.
A year-end note showing a surprise retirement benefit liability sends many SME owners searching for answers. This article unpacks why defined contribution pensions barely register on the balance sheet while defined benefit schemes create a measured, monitored liability under IAS 19 and FRS 102 Section 28, with a full worked example of actuarial movements, journal entries, and covenant implications.
When a lender asks about interest cover and gearing, do you know what they mean or how your numbers measure up? This guide breaks down both ratios with a worked example, shows how to calculate them yourself before applying for finance, and explains what to do if your figures are not strong enough yet.
