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How can Adjust current year

09 December 2021

Unfortunately I have not mentioned director remutation payable imarch 2021 n balance sheet for FY 20-21. And balance sheet finalized. So how can adjust it current year. Also director remuration march month paid march 21 on may 2021.

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14 Replies

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 09 December 2021

Payables has a tax base, it might impact your deferred taxes like give you an asset. So revise it using prior period errors standard, restate all the numbers. Alright, since you paid it in march 21 already in 2021 for the same missing transaction, no need to worry, just put in the payments entry. You have to ask a tax consultant about tax consultant about deferred tax advantage that way. So post it in tax planning section here

SURAJIT SARKAR (29 Points)
Replied 09 December 2021

Sir I have not paid march 21 director remuration also not showing balance sheet under head director remuration payable account. But balance sheet finalized. also march 21 due amount paid may 21. so can I entry for expense director remuration head.

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 09 December 2021

I did not quiet get you. You did not pay in March, nor entered the payables transaction but finalised it. Then, you paid that amount in May. Yes you can and confirm that with your auditor because if the deferred tax moment offsets current taxes by any chance, ie reduces current taxes, there might be a problem. For the time being, you have to record that expense.

prasad Nilugal ( GST Practitioner & Accounts ) (14916 Points)
Replied 09 December 2021

You have to refer IND AS 8, prior period expense . If you are paying remuneration through debiting to profit and loss account , as per IND AS 8 you can show as "prior period Expense F.Y 20-21"in the current year separately in profit and losss account .So please refer IND AS 8 .

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 09 December 2021

what ERP do you use. usually people put everything into transactions and make payments. First you try that and ask your manager to pass a journal to adjust it. All complexity lies with the software

SURAJIT SARKAR (29 Points)
Replied 09 December 2021

Tally software. Actually unfortunately I have not shown payable in balance sheet. Accounts already audited. so I can mention previous year expense in current year

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 09 December 2021

That is great. Can you please check if the the original company records can be modified. If any error message comes up, make

Directors fee a/c

To Payables a/c

and

Payables a/c

To bank a/c

respectively in their respective vouchers. Because after the period end, all the data will be freezing permanently.

SURAJIT SARKAR (29 Points)
Replied 09 December 2021

I know it. but unfortunately mistake and balance sheet finalized. so how can do now

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 09 December 2021

LOL Now the right advise would be, leave it off. Nothing must happen because you are paying your taxes in arrears anyways. So what ever harmful effects will be there in the tax movements must become proper because you made a payment entry before this year closing. You did a good job

SURAJIT SARKAR (29 Points)
Replied 09 December 2021

Thanks sir. can I entry current year expense Paid

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 09 December 2021

Mr. Surajit, dont worry, There is no separate deferred tax rate followed in taxation practices in India; therefore, the general corporate tax rate is applicable in the calculation of deferred tax. This is as my personal knowledge and deferred taxes are calculated like below as per our AS standard. Not my way. So just make an entry and leave it off, everything is covered off.

Deferred Taxes in a nutshell (yasaswigomes.blogspot.com)

SURAJIT SARKAR (29 Points)
Replied 09 December 2021

Link not open

Yasaswi Gomes new (Finance ) (4545 Points)
Replied 16 December 2021

ITS TRUE. Since I have posted the same here on CAclub and outside, maybe there is a privacy policy which restricted opening it. So instead of clicking it, type it in a new browser.

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Replied 31 March 2022

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