Accounting for Directions loan – assets rather than cash

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I have changed from a sold trade to a limited company. The LTD company has absorbed all the assets in the form of a directors Loan… e.g. €100,000. I plan to repay my self €5,000 per month tax free until it is fully paid off. 

To account for this, is it the normal way for a directors loan? I thought it might be different as there is no monetary input. At the moment I setup a separate, virtual bank account and called it “directors loan” and give it a negative opening balance. 

Is the a good or bad way to do it?

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PeteF November 6, 2016
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You could do this by way of a director’s current account which many small companies use. The way you suggested, using a virtual bank account is an easy way of doing it. Another would be to create a GL code called “Director’s Loan” or “Director’s Current Account”, and do the following manual journal
DR Assets you put into the business (Balance Sheet)
CR Director’s Loan Account
 
Under the new Companies Act, 2014 directors loans to the company should be in writing. It would be a good idea to sign this yourself and get any other directors to sign and date it as well. 

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