Friends
If the annual accounts are audited and signed on 5 April, 2012 for year ended 31/03/2012 and thereafter an invoice is received by the company for exepnses of 2011-2012, will it be a Prior Period item ? Prior period items as per AS 5 are those which arise due to error or omission. In the above instance there is no error. Can it be construed there is a omission considering the date of signing of audited accounts ?
Regards,
As correctly stated by you,and taking into consideration the date of audit report, there is no error or omission, it is not a prior period item.
Dear Dipjyoti,
You are not clear whether the invoice is for audit fees or others. If the invoice is for other expenses and the service/goods for the respective expenditure received in the financial year, then you have to create provision even if no invoice is received. So if amounts to prior period exepnditure for other than audit fees in your case.
@ saikaran: how can you create a provision for an expenditure in the final report without the invoice ? It is clear that the invoice was recieved after the date of audit report.
Dear Nikita,
As per AS 29
A provision is a liability which can be measured only by using a substantial degree of estimation; and
CAclubindia
