Unknown Assets

[normalstudent99]

Dear All,

I'm currently making reports and I have some problems. So, the report has a lot of retained earnings, say, $300.000. At the other hands, the assets couldn't reach that ammount (I only get around $50000). Then, my balance sheet is not balance because the credit side is heavier and I don't know how to balance them since the company's assets is disclosed. Could you give some advices to address this problem??
Thanks.

 

[Steve-LevelUp]

There are liabilities missing somewhere, the assets are incorrect, or the R/E is incorrect.

 

[normalstudent99]

There are liabilities missing somewhere, the assets are incorrect, or the R/E is incorrect.

Hi Steve-levelup,

Yes the assets are incorrect because the directors do not want their assets to be included in the report. The R/E is also incorrect because some of them have been taken as dividends (but I don't know how much was taken because once again, the numbers are disclosed). Now, I'm struggling to balance the report because the data is limited. How should I balance the balance sheet??

 

[Steve-LevelUp]

Consider the audience. If it is for a potential buyer, and the directors do not wish to disclose certain aspects of the assets at this stage, then you can simple redact the numbers. This would imply that there is a balance that simply is not being shared at this time. You do not want to just remove the numbers, pretending they are not there. If you are forced to remove these and present to a bank, then you should quit, because that is a good sign of fraud to come.

 

[normalstudent99]

Consider the audience. If it is for a potential buyer, and the directors do not wish to disclose certain aspects of the assets at this stage, then you can simple redact the numbers. This would imply that there is a balance that simply is not being shared at this time. You do not want to just remove the numbers, pretending they are not there. If you are forced to remove these and present to a bank, then you should quit, because that is a good sign of fraud to come.

Hi Steve-levelup,
The audiences are company's management and also for government tax report. Could I reduct the R/E so that it could balance the assets?? But, I think it is a wrong doing.
Thanks a lot.

 

[Steve-LevelUp]

If the directors are unwilling to share the full financial statements with management than there are serious trust issues within the company. If they are unwilling to share the full financials with the government, then that is what we call 'tax fraud' which I am pretty sure is a crime. Knowingly submitting false information to the government is also a crime. Both of which could result in fines or jail. So, do not do this. These assets are either company assets, or they are not company assets. There is no in between.

 

[normalstudent99]

If the directors are unwilling to share the full financial statements with management than there are serious trust issues within the company. If they are unwilling to share the full financials with the government, then that is what we call 'tax fraud' which I am pretty sure is a crime. Knowingly submitting false information to the government is also a crime. Both of which could result in fines or jail. So, do not do this. These assets are either company assets, or they are not company assets. There is no in between.

Hi Steve-levelup,


Yes I know. I will talk to them to get full information, but if I failed then I'll quit anytime soon. Thanks for your help Steve-levelup.