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Prior period items

praveen kaushik (assistant accounts) (38 Points)

14 May 2011

I am workin in pvt. ltd. co. my question is that, the company made the provisions for the financial year 2010-11, but there were some vendor bill of the same financial year not coverd in the provision. So i want to know, what is the alternative option to clear the vendor payment such case. The books are closed of the F.Y 2010-11.

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7 Replies

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 14 May 2011

You need to book them in the current year as prior period items. The same are disclosed separately in the Profit and Loss accounts. You can make the payments to the vendors after booking the expenditure. However, you wont get the deduction of the same in the income tax.

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praveen kaushik (assistant accounts) (38 Points)
Replied 14 May 2011

Sir, thanx for the reply, but sir the books are closed now, so in that case?

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 14 May 2011

Thats what i said that book in the current financial year 2011-2012 as prior period items.

praveen kaushik (assistant accounts) (38 Points)
Replied 14 May 2011

ok, sir got the point, so in that case should i have to mention it sepratly in the profit and loss a/c of the year 2011-12?

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 14 May 2011

Yes. You have to mention it separately.

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 15 May 2011

YES, IT IS TO BE MENTIONED SEPERATELY

praveen kaushik (assistant accounts) (38 Points)
Replied 15 May 2011

so,what is the treatmment as fas as TDS is concern? as the expenses are for pertaining to the the 2010-11, but i am paying them as prior period expenses for the 2011-12, so tell me the effect of that, in my currect year book.