Gave too much excess cash to parent

aprilgirl80

:eek::eek: Hi, hoping someone can help me. I have an entity which had a lot of excess cash and it gave it to its parent, however at the time I was being stupid and gave it all to the parent but didn't think of it as a dividend so actually in fact paid too much dividends. I have reversed in my accounts the dividend which would not be allowed, but now have a massive receivable amount owed from the parent to the subsidiary for this excess cash - anyone have any ideas of how to get around this, other than having the parent give the funds back to the subsidiary? And if that is to happen, how on earth am I meant to get the money out at all.....unless I wind up the company?

Graham

aprilgirl80 wrote: »

:eek::eek: Hi, hoping someone can help me. I have an entity which had a lot of excess cash and it gave it to its parent, however at the time I was being stupid and gave it all to the parent but didn't think of it as a dividend so actually in fact paid too much dividends. I have reversed in my accounts the dividend which would not be allowed, but now have a massive receivable amount owed from the parent to the subsidiary for this excess cash - anyone have any ideas of how to get around this, other than having the parent give the funds back to the subsidiary? And if that is to happen, how on earth am I meant to get the money out at all.....unless I wind up the company?

Talk to your accountant, he/she will have an understanding of your company structure etc and should be able to advise the most appropriate/cost effective/legal way of doing this.

If you don't have an accountant. Get an accountant.

Peterdalkey

I dont know what you mean by "gave", was it a dividend or was it a loan. There are mechanisms for forgiivness of inter company debt among connected companies.

It cannot be a receivable if it was a dividend. It would seem like Graham has a point, if you have made this mess because you did not seek proper professional advice first time around, it would be smart to do so now!

aprilgirl80

Hi - I am actually the accountant, I had only joined the company at the time. On a consol basis, it washes out but separately it is sitting as an intercompany debtor/creditor between parent/subsidiary. I originally gave it as a dividend to the parent but now I am classifying it as intercompany, it is not a formal loan though, more a trading balance??

Peterdalkey

To me it is a simple short term inter-company loan, an asset in the lender and a liability in the other! If there is likely to be a counterbalanceing tarde, you might classify it as a prepayment/accrual. I am an engineer!!

Graham

aprilgirl80 wrote: »

Hi - I am actually the accountant, I had only joined the company at the time. On a consol basis, it washes out but separately it is sitting as an intercompany debtor/creditor between parent/subsidiary. I originally gave it as a dividend to the parent but now I am classifying it as intercompany, it is not a formal loan though, more a trading balance??

Ohhhhhhhh

Perhaps here ->http://www.boards.ie/vbulletin/forumdisplay.php?f=872

Peterdalkey

I feel a Father Ted bank account moment coming on....! It was just "resting" in the parent Co account.......;)

aprilgirl80

Thanks both, well the good thing is we still have the money in the parent bank account, so in the next month or so I can just transfer it back as necessary? Yes it is "resting" at present!!

DubTony

Graham wrote: »

Ohhhhhhhh

Perhaps here ->http://www.boards.ie/vbulletin/forumdisplay.php?f=872

Or here ... even ...


Sorry. Couldn't resist.