Kumar Gaurav (Going...to be C.A soon...) (1624 Points)
11 March 2014Dear Experts
A firm did'nt received the water & sewarge bills for last two years from govt. agency......but in current fiscal year they received the bill alongwith previous dues....now, my question is that whether we should consider the "previous dues" amount as "prior period items"???? If yes, then why?
if no, then please xplain the same.
Thanks
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 11 March 2014
Kumar Gaurav
(Going...to be C.A soon...)
(1624 Points)
Replied 11 March 2014
Please xplain further.....what is term error or ommission???
Because in my opinion client should have passed provisions entries in past period for such o/s on estimation basis.
Not to record such amount in past will not amount to an "ommission"???
I am in the opinion that, it should be recorded as prior period expenses....i may be wrong....but let have some more opinion on the same.
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 11 March 2014
As per AS -5
Prior period item does not include
* Arrer paid
*Correction of Accounting estimates on revision of estimates.
*Assets or liability item that are being adjusted.
Error or omission occures due to mathemetical mistekes in appliying accounting policies, misinterpretation of facts or Oversight.
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