Prior period exp----urgent query

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 Dear Experts

One of our client is failed to pay and booked the expenses/Provision of their Water and sewrage bill for last two financial years.

Bill is as under:

01.12.12 to 31.05.13= 9605/- Rs.
Includes previous balance of Rs. 7605/- for previous two F.Years

Please suggest whether 7605/- should be shown as "Prior Period Expenses" or not??

Thanks In advance

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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22 August 2013 In books of A/c it should be shown as prior period items as per AS-4

And in case of Computation of Income these Expenses required to be disallowed

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Ganeshbabu K

Ganeshbabu K (Expert)
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22 August 2013 if Bill date is in F.Y.13-14 we can ommit this..can say that it is payable on receipt of invoice .
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however if you want to disallow it should be bifurcated for previous year,,as bill was till 31.05.2013
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if it is disallowed you need to disclose in form 3CD in sheduel,,

Details of Prior Period Expenses debited to Profit and Loss Account for the Year Ended 31st March, 2012

(Refer Clause 22(b) to Form 3CD)

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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 I guess it relates to AS-5....correct me if i m wrong

To Mr. Ganesh: Thanks for replying....
but
i am confused as bill is as under in detailed:

Previous Balance: 7605/-
Current bill: 2000/-
Total due bill: 9605/-

Now what to do? please suggest

Ganeshbabu K

Ganeshbabu K (Expert)
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22 August 2013 As i said in earlier reply ..
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in my opinion i will not disallow this amount as bill date is fall in current period however particulars mentioned in bill may related to previous year
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and more over 9605 is not considerable amount and it can be ommitted,,it is not material amount considering with the size of company
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however you can deside on whether disallow or not..if you want to disallow you need to bifurcate expenditure for prev.year and current year and previous year can be disallowed
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what you mean by previous balance..did he raised invoice now only for work done in previous year or reminding about his outstanding due..refer to balance standing in his account in company books before this bill
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however if you ask me to say.i will not disallow this amount

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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 Before this,,,,our client has'nt received any bill from govt office for water charges....they only received the bill mentioning previous dues in current fiscal year...

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anywayz i am going to disallow the bill as it relates to two previous fiscal years and amount is material as well considering the size of co.

Thanks alot sir!