13 January 2011
Case: We have issued a credit note to a debtor in 2009 which has been accounted in our books. later in the year 2011 we came to know that he has not honoured the credit note and no entry has been made in his books of accounts.As the year end is closed we cannot change books of accounts but they want a fresh credit note now.As per Acoount Standards it will fall under prior period item and we can cancel the credit note issued in 2009 and can make a fresh issue to them during the year. Is it correct? does it mean i can cancell old and make a new credit note
13 January 2011
The preface to accounting standards mention that they are applicable only in respect of material items.
Even if it is material, you have already accounted in the books and it is closed, you may considering an out of books Credit note or a proforma kind of credit note instead of reversing the earlier entry and doing for the same amount.
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