16 September 2012
I need advice regarding short provision of expense. If Provision of expense made in fy 2011-12 for rs 5 lacs but actual expense is rs. 6 lacs. What is treatment of rs. 1 lac in fy 2012-13 If I make entry in my book as such
provision for exps. Dr. 5 lacs expense Dr. 1 lac To Creditors. 6 lacs then rs 1 lac will be prior period exps (which cant be claimed as deduction for IT purpose in fy 2012-13) or not. Please suggest the way so rs 1 lac become dedutable for IT purpose in fy 2012-13.
19 September 2012
You need to inquire about the reason for short provision i.e. normal or abnormal or due to error or omission or due to change in estimate. In case of error or omission it should be treated as prior period item otherwise treat it as normal expense.
CAclubindia
