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Provision for audit fee

satya (no) (88 Points)

15 June 2016

audit fee of 2015-16 can claim in 2016-17 as per income tax act?

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Harshit Kabra (INVESTOR) (Student CA final) (1113 Points)
Replied 15 June 2016

Say like , u have provided a legal and professional provision for 1lac rupees , subsequently if the actual expenses found 1.5Lac , then u have to treat 50000 as prior period expenses.-

The Journal Entry will be

Audit Expenses provision A/c Dr 100000

Prior period expenses(if short provision provided) Dr 50000

Bank A/c Cr 150000

As per AS-5 the nature and amount of prior period items should be separately disclosed in the statement of Profit and Loss in a manner that their impact on current profit or loss can be preceived.

Thanks

Harshit