Accounting Principles And Procedures - Summary Of Experience Flashcards
What does a set of company Accounts typically contain?
- Chairman’s Statement
- Independent Auditors Report
- Income Statement (Profit & Loss Account)
- Statement of Financial Position.
- Corporate Governance Report
- Remuneration Report
- Other Statutory Information
What is the difference between a balance sheet and profit and loss account?
- A balance sheet is a statement of the business’s financial position showing assets and liabilities.
- A profit & loss account is a summary of their income and expenditure account.
What is the difference between management and audited accounts?
- An audited account is prepared annually by limited companies to showcase financial actions taken by the company that year.
- Management accounts are internal, may be in more detail to help the company identify where it is struggling in certain financial areas.
Who is qualified to advise on financial matters?
A chartered accountant.
What is included in a profit and loss statement?
Income - expenses = Net Income.
Operating expenses include - cost of sales, marketing, tech
Capital expenditure: large transactions.
What does the RICS say about Service Charges?
In accordance with RICS Professional Standard Service Charges in Commercial Property (2018) (Effective April 2019) the objectives are:
- To improve standards and promote best practice.
- Ensure timely issues of budgets and year-end certificates.
- Reduce the cause of disputes.
- Provide guidance on negotiations.
How are invoices approved in your firm?
When work is instructed by the property managers, correct invoice billing address are sent prior to works, invoices are sent to in house accounts team and are then sent to property managers to approve.
Once approved, they are sent back to accounts to pay.
What is the difference between service charge certification and audited accounts?
An audit is an independent external review process that adds to the credibility of an entity’s disclosures.
A year end certification is carried out by a third party accounted that certifies the information provided to the occupiers at the end of the service charge year.
What are the Mandatory Requirements under the RICS Prof Standard Service Charges in Commercial Property January 2022
- All expenditure that a landlord or manager seek to recover must be in accordance with the terms of the lease.
- Landlord and managers must seek to recover no more than 100% of the proper and actual costs.
- Landlords and managers must ensure that service charge budgets are issued annually to all tenants.
- Landlords and managers must ensure that an approved set of service charge accounts showing accurate record of expenditure of the SC is provided annually to all tenants.
- Ensure that service charge apportionment matrix is provided annually to all tenants.
- Service charge monies must be held in one or more discrete bank accounts.
- Interest earned on service charge accounts must be credited to the service charge account after appropriate deductions have been made.
- Where acting on behalf of the tenant, practitioners must advise their client that if a dispute exists, any service charge payments withheld by the tenant should reflect only the actual sum in dispute.
Can you name me a recent bit of case law in relation to service charges?
Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd
Blacks was responsible for paying a “fair and reasonable proportion” of the total service cost.
Blacks refused to pay the full amount, saying that the charge was excessive and included unnecessary items and expenses that’s were not properly due under the terms of the lease.
“Pay Now, Argue Later Regime”
How are Service Charges reconciled?
Income demanded against all service charge expenditure for a given service charge accounting period. This enables the calculation of any balancing charges and credits due from the tenants.
