What is a statement of Affair and what is included in it?
A Statement of Affairs is a document that lists the assets and liabilities of a company.
It includes a complete accounting of the statement of financial position and obligations, as well as a professional opinion on the value that could be realized through the sale of corporate assets. As a result, it shows how much money would be left over once creditors are paid. Typically, the transaction’s administrative fees are not included at this time. A thorough record of a company’s liabilities contains a list of all creditors and shareholders, as well as the amount owing and to whom it is owed.
View and Position on State of Affairs
By identifying all business assets, a Statement of Affairs clarifies the company’s financial situation. It creates a clear audit trail that demonstrates whether any assets were sold in bankruptcy, which is a crime that the Insolvency Service would investigate and might lead to director disqualification if creditors’ interests were not prioritized.
This document also makes it easy to keep track of how much money was produced from each asset sale and compare it to the IP’s estimates.
Failure to deliver a Statement of Affairs during insolvency may result in a penalty, but it will also reflect poorly on the directors’ actions in the view of the insolvency practitioner. This could be seen in small and medium scale companies. Therefore, proper guidance should be received for SMEs to avoid these circumstances.
Due to the complexity of a Statement of Affairs, it is highly recommended that you use a licensed insolvency practitioner to create it. KLOUDAC can help with this and provides a comprehensive guide.
KLOUDAC Accounting Firm Dubai, UAE
KLOUDAC is a recognized accounting firm in Dubai, UAE with 15 years of service experience. We have built connections with over 500 customers. It has also won the certification of Xero Payroll and certification of Xero advisor from the world leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero. Accounting and Bookkeeping is more convenient for the SMEs via KLOUDAC since they provide their clients with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software and more.