Treatment of reimbursements

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2014 Hi Experts

I am working with an IT Co. The co is providing service to client outside india. Fue to that many employees are travelling to client place for providing service but as per contract all travel and allied charges are reimbursable from client.

Please advise the accountability if expenses are paid by co and then charged from client without any margin.

Right now co. is showing the expenses in their books and when get reimbursements it is being added to sales.
Please advise is it a right treatment?

Co. is SEZ. waiting for reply.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

18 July 2014 Reimbursement of expenses without margin need not be booked under sales. The expenses may be booked under, expenses recoverable under current assets and adjusted as and when payments are received.