Disallowance of prior period expenses

Need clarity on disallowance of following prior period expenses
1. services executed but invoice not yet certified and provision not taken in the fy
2. supply material consumed in the fy but not yet certified and hence provision not taken in the fy
Replies (1)

Prior period expenses are not automatically disallowed. They are allowable if you can prove that the liability for these expenses became fixed and crystallized during the current financial year. If they were ascertainable in an earlier year, they are likely to be disallowed. To ensure a successful claim, maintain robust documentation explaining why the liability could not have been crystallized or accounted for in the earlier period.

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