Product is no longer legal - accounting treatment

MooreAccounts

Hi guys,

I have a client in the vaping industry. He's been trading as a sole trader for the past couple of years, before incorporating last July. He mixes various flavours to create blends for sale to consumers.

A loophole he was exploiting has now closed, and as such some of his product is now illegal to sell. It's my understanding that, as none of this is able to be sold, that it now must be written off. Am I right in thinking that?

Thanks in advance!

MooreAccounts

My thoughts exactly. The client asked for further clarification and I had a moment of doubt that I'd missed something!

Neillaw

Wouldn't be legal high's by any chance?

Stock should be w/off and not sold under the counter.

Mickdundee - Perishable Sick?

MooreAccounts

No @Neillaw - it was vaping/e-liquids for electronic cigarettes. Not too knowledgable on it myself though!