Prior period treatment

This query is : Resolved

Guest

Guest (Querist)

11 August 2011 In previous year Audit report one asset is shown as Fixed Asset but it's nature is current.How will treat in current year audir report.

Abrar

Abrar (Expert)
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12 August 2011 Accounting Entries in C.Y.

1. Exp A/c Dr (Gross block)
To Asset A/c

2. Provn for Dep Dr (Dep amount of P.Y)
To Sundry bal w/ back

3. The Net block value (ie 1-2) should be disclosed as prior period expenses below B/f balance of P&L & above Appropriations

The above adjustment may suitably disclsed in Notes to A/cs. No reoprting in Audit report necessary on this issue.