The opening entries-executorship laws and accounts, Financial Accounting

The opening entries

1. Assets of the estate or trust
In both cases the various assets of the estate or trust are debited to appropriate accounts and credited to the Estate Capital Account;

The value at which assets are introduced is as follows:—

a) In the case of an estate or a trust following an estate — probate value;
b) In the case of an inter vivos settlement — market value at the date of the settlement.

2. Liabilities of the estate or trust
The various liabilities of the estate or trust are credited to appropriate accounts  and debited to the Estate Capital Account.

3. Balance on Estate Capital Account
The balance on the capital account of an estate will represent the net value of the deceased's estate. When Estate Duty used to be charged in Kenya, the balance on the estate capital account was the figure on which Estate Duty was charged, subject to adjustments (in exactly the same way as Income Tax is charged on the net profit of a business, subject to adjustments).

Posted Date: 12/13/2012 5:15:50 AM | Location : United States

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