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Accounts entry for services rendered in March

Divya Garg (Director) (178 Points)

30 March 2014

Hi All Experts,

We are a pvt ltd company and have provided services to a client based in Australia in month of Feb and March 2014 but invoice for the same will be raised in April. Invoice will have clear descripttttion of the work that work was rendered in Feb and March but Invoice will have invoice date of April 1.

Which financial year that income will fall into ? 2013-2014 or 2014-2015 ?

Please let us know.

Regards,
Divya Devi

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12 Replies

manik jain (articled assistant) (28 Points)
Replied 30 March 2014

I think,services will be recognised in the year in which it is provided on basis of accrual concept

CA Saroj Kumar (Keen to learn something new every moments) (2588 Points)
Replied 30 March 2014

yes income should be recognised as per accrual concepts...in 2013-14, and receipt entry should be made in 2024-15

Divya Garg (Director) (178 Points)
Replied 30 March 2014

Don't we normally do account entries of the basis of "Invoice Date" and not on the basis of date when the services were rendered ?

Originally posted by : manik jain
	I think,services will be recognised in the year in which it is provided on basis of accrual concept

(Guest)

first if u r asking from service tax point of view...

Its simple u have to pay service tax on advance or invoice date whichever is early

now if u asking about income.

if the contract is very clear that u can get the payment without any provisions..

and u sure about the payment..

then u can book in the current year on accrual basis...

i think u will understand.. still if u have doubt please ask a bit clearly i will answer

Divya Garg (Director) (178 Points)
Replied 30 March 2014

Thanks Ankit.

Service tax is not applicable here so it's more about which finanacial year this income will be considered in - 2013/2014 OR 2014/2015 ?

As I said Invoice date will be 2nd April on invoice but invoice will have a line item saying that it is for services rendered to client for the month of feb/march 2014.

I actually want to book it in next financial year.

Let me know.

Regards,
Divya

(Guest)

Than u must account of this in current year...as services is provided by u in this current year and the point of income is created and completed in the current year iteself.. so it should b a part of current year profit....

Md Raza Riyasat Husain (Accountant ) (23 Points)
Replied 31 March 2014

SIR I THINK CONSIDERING THIS INCOME IN NEXT YEAR SHALL BE BETTER FROM SERVICE TAX DEPOSITING POINT OF VEIW AS INVOICE CONTAINS APRIL DATE AND NO ADVANCE IS RECEIVED.

(Guest)

Service tax is not applicable on this .... as madam said.............

Saji John (Finance Manager) (26 Points)
Replied 03 April 2014

But why do you want to show the service rendered of the previous year to be shown in the current year, is it to avoid anything. Please clarify, I dont think it is advisable.

CA PRIYUL SHAH (JOB) (901 Points)
Replied 21 May 2014

Income will be fall in 2014-2015. As pe conservatism concept only future loss shall be accounted.

Pradip Parida (Manager Corporate Controlling and Accounting) (139 Points)
Replied 01 June 2014

Invoice date is irrelevant for accounting. Revenue recognition should happen based on competion of service. In this case it should happen in the financial year 2013-14.

Since the services rendered to outside India - Service Tax is not applicable and hence no service tax liability to be paid to govt.