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It is prior period item or not

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This query is : Resolved

uday singh Negi (Querist)

31 May 2013 suppose a company get bill from a shipping company as on 15.03.2013 (when shipment move ) and he raised the bill to his customer as on 10.4.2013 (when shipment reached )

1)so where to book expense and income in f.y 2012-13 or in 2013-14

2)so now here if he record that expense as on 10.04.2013 against it's income ( as per matching concept )

3)it is right way to book the expense and income or it is prior period item

4)is here matching concept and accrual concept are conflicting

because as per accrual concept when expenses accrued we have to book but as per matching concept income and expense should be record in the same financial year

thanks

CA SMR

CA SMR (Expert)

10 June 2013 In my opinion expense should be booked under prepaid expenses in the year when it is incurred,fy 2012-13 when the shipment moves.Revenue earned from the delivery of the goods should be recognised as per AS 9 which can be completed service contract method in this case when shipment reaches in the fy 2013-14.Prepaid expenses can be expensed out in 2013-14.

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