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Summary ULAW LPC, Solicitors Accounts Chapter Readings
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ULAW LPC, Solicitors Accounts Chapter Readings
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Intro to PP – WS2 Solicitors Accounts TIFF LIAOChapter 16 – Financial Statements Page 181
INTRODUCTION
If you handle money for client, you should always prepare a written statement explaining:
(a) How the clients money held has been dealt with; AND
(b) How much (if anything is due to or from the client).
Statement is important in property transactions where its likely to be sent to clients part-way the transaction to inform
them:
(a) how much they will have to provide; OR
(b) how much will be available to them at the end of the transaction.
LAYOUT
NO SET LAYOUT – but the statement MUST be clear + easy for the client to follow.
Common layout = show the statement in the form of a sum.
(1) Starting with the purchase price
(2) Adding expenses
(3) Deducting receipts
OR IN THE CASE OF A SALE
(1) Start with the sale price
(2) Deducting expenses
(3) Adding receipts
EXAMPLE
FINANCIAL STATEMENT [DATE]
TO: MR AND MRS BOUNDS
PURCHASE OF 3 WICKET STREET
£ £
Purchase Price 300,000
LESS Pre-deposit (30,000)
LESS mortgage advance net of legal fees (222,340)
(252,340)
47,660
ADD Stamp duty
Land registry fees 5,000
Profession charges 100
Search fee 400
VAT on professional charges & search fee 20
84
5,604
LESS Received on account of costs (400)
DUE FROM YOU 52,864
WHERE A SIMULTANEOUS SALE AND PURCHASE ARE INVOLVED
It is good practice to show separate subtotals for the sale and for the purchase.
This is so that the client can see how much the purchase cost and how much is available from the sale.
The statement may then show in a summary the total amount due to or from the client in respect of both transactions.
1
TIFF LIAO
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