Journal entry to offset tax loss in the books of service provider to issuing financial credit note.

CA Neha Agrawal (CA) (816 Points)

25 October 2021  

A service provider has to issue Financial Credit Note to its customers as the time period of 6  months from close of financial year is expired. Reason for issuing credit note is that customer was overcharged for certain subscripttions not availed by the customer.

What would be journal entry to offset tax loss in the books of service provided. Whether it will charged against an expense account or corresponding revenue has to be reversed per IFRS.