17 articles
A £50,000 Innovate UK grant should not be booked as income the moment it hits the bank. Under IAS 20 and FRS 102, grant income must be matched to the project costs it funds, using deferred income accounting, careful journal entries, and attention to R&D tax relief rules.
Granting EMI share options feels like a cash-free way to reward senior staff, but accounting standards say otherwise. Learn how IFRS 2 and FRS 102 require you to expense a £40,000 EMI grant over its vesting period, with worked journals, a leaver pitfall, and the deferred tax issue most SMEs miss.
A £40,000 cash shortfall in a twelve-month forecast is not just a funding headache — it's a formal accounting trigger. This article explains going concern rules under UK GAAP and IFRS, walks through a worked cash flow example, and shows directors exactly what to document, disclose, and act on before signing their accounts.
Consolidating a part-owned subsidiary means pulling in 100% of its figures, but the slice you don't own still has to be shown clearly. This guide uses a worked £2m acquisition to show exactly how to calculate and present Non-Controlling Interest at acquisition and in year-end profit, so your consolidated balance sheet actually balances.
A £250,000 construction loan shows exactly how IAS 23 splits borrowing costs between capitalised asset cost and expensed finance charges — and where SMEs most often get the timing wrong.
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.
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.
