How to account during the current year for the below situation.Kindly please find me Journal entries too. (how to account such huge liability in current year)
Situation; 1.Lease rent not paid or accounted last ten years, sum of Rs. 3,000,000 2. we owed to government and they send a notice, thus we came to know this liability.
25 May 2015
As your comes to know from notice of govt department and this is also part of penalty and you have not paid and accrued during last years. as per my understanding you have to pay to govt the same amount in current year.hence in my opinion for the purpose of accounting of this item please refer Accounting slandered 5 Accounting for prior period items.
CAclubindia
