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,
Yes in the Year 2012-13, it would be considered as an prior period expense, as the invoice was received after finalising the accounts for 2011-12.
However you can proove to teh satisfaction of the AO that these were being received late by the co after finalization of the accounts, so that expenditure would not be disallowed in the assessement for A.Y.2013-14.
It cannot be considered as an ommission, as omission also refers to an error. If an invoice was being received by the co before finalization of the accounts, but the accountant didn't account for the invoice then that would be considered as an omission.
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