Accounting treatment of discount coupons received

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This query is : Resolved

Ashish goel (Querist)

22 September 2015 What Will be the accounting treatment of Discout Coupons received by a Co. as a complementry Gift From Banks Or say other Co. which can be utilise by Co. to pay off there Electricty Liablity or say, adjusting with amount while booking filghts through websites, Will they be covered in othere income within books if Co. reedeem the same or not.

Ex- Co. A Ltd received Coupons of 500000/- from Xyz Ltd which Co. a utilise to pay off his telephone Liblity.

Amol S Joglekar

Amol S Joglekar (Expert)

22 September 2015 is there any EXPIRY date for those COUPONS?

Ashish goel

Ashish goel (Querist)

22 September 2015 yes, expiry is there

Also from here 2 cases generate.

1.Co. Do utilise the cuopons within the expiry peiod.

2.Co. do not utilise the coupons within the period.

Amol S Joglekar

Amol S Joglekar (Expert)

23 September 2015 01.The expiry date is a matter of concern and that is why I enquired about the same

02. Depending upon the expiry, the classification as to CURRENT and/or NON CURRENT shall be made.

03. Discount coupons worth five hundred thousand i.e. (5 lakh as per Indian vocabulary) seems to be on imaginary scale. Please confirm the same. If it is really on that high a scale......it should be accounted for as other income.

Debit Discount Entitlements
Credit Other Income.
(At the time of receipt of the coupons i.e. entitlements)

Debit Other Income
Credit Income earned but not due
(At the time of year end, so much of the discount unavailed)

Debit BSNL
Credit Discount Entitlements
Credit Bank/Cash as the case may be
(At the time of settling the telephone bill...... BSNL assumed)

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