sec.141Directors to ascertain certain matters

sec.141 Directors to ascertain certain matters

Before the profit and loss account and balance sheet are prepared, the directors of a society must take reasonable steps— to ascertain what action has been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts and to cause all known bad debts to be written off and adequate provision to be made for doubtful debts; and to ascertain whether any current assets, other than current assets to which paragraph (a) applies, are unlikely to realise in the ordinary course of business their value as shown in the society’s accounting records and, if so, to cause— those assets to be written down to an amount they might be expected so to realise; or adequate provision to be made for the difference between the amount of the value as so shown and the amount they might be expected so to realise; and to ascertain whether any non-current asset is shown in the society’s documents at an amount that, having regard to its value to the society as a going concern, is more than the amount it would have been reasonable for the society to spend to acquire the asset as at the end of the financial year and, unless adequate provision for writing down the asset is made, to cause to be included in the accounts information and explanations to prevent the accounts from being misleading because of the overstatement of the amount of the asset.

• (a) to ascertain what action has been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts and to cause all known bad debts to be written off and adequate provision to be made for doubtful debts; and
• (b) to ascertain whether any current assets, other than current assets to which paragraph (a) applies, are unlikely to realise in the ordinary course of business their value as shown in the society’s accounting records and, if so, to cause— (i) those assets to be written down to an amount they might be expected so to realise; or (ii) adequate provision to be made for the difference between the amount of the value as so shown and the amount they might be expected so to realise; and
• (i) those assets to be written down to an amount they might be expected so to realise; or
• (ii) adequate provision to be made for the difference between the amount of the value as so shown and the amount they might be expected so to realise; and
• (c) to ascertain whether any non-current asset is shown in the society’s documents at an amount that, having regard to its value to the society as a going concern, is more than the amount it would have been reasonable for the society to spend to acquire the asset as at the end of the financial year and, unless adequate provision for writing down the asset is made, to cause to be included in the accounts information and explanations to prevent the accounts from being misleading because of the overstatement of the amount of the asset.