Free service received by firm

is there any accounting treatment if free service is received by firm does it is treated as gain/profit & recognize in pl a/c ??
Replies (2)
Quick Summary
This discussion explores the accounting treatment for free consultancy services received by a firm. It questions whether such services should be recognised as a gain or profit in the profit and loss account. Potential treatments include debiting maintenance/overhaul expenses and crediting a provision, or debiting both provision and maintenance/overhaul expenses if the service is compulsory and based on past experience, with a disclosure made instead of recognising a gain.

Dr. Maintenance/overhaul expenses

Cr. Provision 

If maintenance is compulsory based on past experiences.

Dr. Provision

Dr. Maintenance/overhaul expenses

This does not recognise any gain plus make a disclosure. 

 

Free service is not of machinery and plant
from. free service I mean free consultancy

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