Investment from Investors via an Advanced Service Agreement
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jslobom
Registered Posts: 1 New contributor 🐸
I haven't come across this before in practice and want to check my thoughts. If an investor gives money to a ltd company in advance of shares which will be converted at a later date, but they haven't converted at year end date how do we reflect on the balance sheet. I am being pulled toward other reserves as they will increase the equity of the business rather than a liability as the service agreement states that the advanced money doesn't need to be a repaid as it is not a loan but an advance. Can anyone help and maybe point me to more reading on this matter. Thank you
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