Hi Peter
As your client is putting the money aside to pay for a project it would still be a form of equity in the business.
Would it, therefore, not be better to set up a "project reserve account" and have this in the Financed By/Equity section along with the remainder of the retained profit etc?
This would then give a truer valuation of the business rather than reducing the value of the business by the amount that has been saved up.
Once the client has saved enough for the project to go ahead the funds can then be transferred from this project reserve account in order to pay for it.
Kind regards
Gordon
|