Prior period expenses

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CA-ASPIRANT (Querist)
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12 December 2009
Dear sir,

Our client received a bill for retainership FEES for the financial year 2007-08 on current date i.e 21.10.2009.

Is this expense treated as prior period expense.

Please answer it keeping in view AS-5.

Thanks

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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12 December 2009 Yes, it is a prior period expense.

According to AS-5, Prior Period Items are income or expenses, which arise in current period as a result of error or omission in the preparation of financial statement of one or more prior periods.