Current year revenue income or prior period income?

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Jigar Chudasama (Querist)

16 March 2012 Hello Experts,
My Query is,
Suppose I am a Builder, one of my client had made payment of his flat in financial year 2010-11 and I showed the same as "Advance From Customer" in Liability side of my Balance Sheet of 2010-11 but I had not raised invoice in 2010-11. I issue the same invoice in current financial year and based on that invoice I booked my income in current financial year.
Is my accounting treatment true?
if not please let me know the correct accounting treatment?

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

16 March 2012 Yes your treatment is correct when is the invoice raises then is income generates.
OM SAI SRI SAI JAI JAI SAI

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Jigar Chudasama

Jigar Chudasama (Querist)

16 March 2012 thank you sir..
but sir is it valid to issue last year's invoice in current year and booked income this year?
i mean to say that is it not last year's income and should be treated as proir period item in currrent year??

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

16 March 2012 You not raised invoice in last year just you agreed to sale and for it received an advance so if you fail to sale you have to liable to repay the advance the liability removes only on the date of sale i.e date of invoice. That means till the transfer of owner ship your liability exists by raising the invoice your liability gone and the ownership transfer thus liability amount treated as income at that time so your treatment is correct.
OM SAI SRI SAI JAI JAI SAI

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