Corporate Recovery & Insolvency Flashcards
What types of reports are typically required in an insolvency situation?
-the notional final account
-completion final account
-progress report- progress made
-defects report
-report on bonds/ collateral warranties
What is a notional final account?
An account assessing the party’s liability to the insolvent company and showing implications on the contract
It recognizes costs incurred at the time of insolvency and builds on that cost to show the cost to complete.
Why might the notional final account be higher than the anticipated final account?
It recognizes additional costs incurred by the party at the time of insolvency
These costs reflect the expenses related to completing the project had the original contractor finished the works.
What is difference between the notional final account and the original sum represent?
A debt, which typically arises due to additional costs of appointing a new party to complete the construction project
This difference is generally a debt rather than a gain.
What is a completion final account?
The final account reflecting the total costs incurred upon completion of the project
It is prepared after the construction project is completed.
When giving advice to an insolvency practitioner, what issues should be considered?
