Prepayment with shares. How to book?

Lenaerts

Hi everyone! Due to the corona crisis liquidity problems one of my new customers proposed me to pay for my digital marketing services with his company shares. He is willing to fulfill the obligations immediately, before I even start the project. For this reason I see it as a good opportunity to receive a big advanced payment before the project begins. On the other hand, I do not clearly understand how can I make a book record for such income? Can anyone help me please?
Thank you in advance for any possible answer!

Abgegtern

Lenaerts Well I think the idea of the procedure is clear. If we assume a “normal booking’, so VAT obligatory and agreed method.
Transfer of shares (assuming long-term holding period):
Probably an advance payment. This means as soon as the shares are contractually yours (with a purchase contract, etc.) and you have checked the recoverability:
participation / advance payment
if goodwill is still involved: goodwill / advance payment
When rendering services (invoicing):
receivables / income (including VAT)
When due (or directly after the service has been provided):
advance payment / claims

Manninen

Hello Lenaerts

This situation seems a bit complicated on the first glance; however, nothing is impossible.
As I see it, you receive an advanced payment (as you said the project did not start yet) in this case you book: 3400 in 2030. On the other hand, if you provide the service than it must be 1600 to 2030

All the best!
Manninen

Pham

Good day! I would say that I agree with the booking format proposed by Manninen , however shares seem to be more asset like, than cash. So possibly I would recommend to make a booking on the asset account e.g. (financial investments or participation). Besides that, I would clarify for the possibility to transfer shares, provisions on restrictions, and the company for a form of ownership. The last but not the least, I would also check the company balance sheet first, to understand are the shares worthwhile. Have a nice day!