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Prior period Entry

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Kishore Nuthalapati

Accountant for multiple small entities

171 Points Posted on 16 March 2023

Hi Sir/Madam

Can I make prior period entry in Proprietor accounts also

I have seen few Capex items are expensed in previous financial year

It's a proprietor entity

Can I make prior period entry in current financial year

Please advise

Thanks in advance

Replies (3)

Quick Summary

This discussion addresses whether prior period entries can be made in proprietor accounts, particularly when Capex items were expensed in a previous financial year. The advice given is that if Accounting Standard 5 (AS 5) permits, such entries can be made in the current financial year. It's important to note that these entries must be shown separately in the Profit and Loss account, and there might be implications for income tax deductions.

prasad Nilugal

GST Practitioner & Accounts

15150 Points Posted on 16 March 2023

If AS 5 ( Accounting standard) is applicable and permits, then you Can make prior period expenses entry in the Current period, You have to show separately in Profit and Loss account ( Check AS5)

Entries as follows.

prior period expenses A/c Dr
To Cash / Bank A/c Cr
( Last year expenses)

Profit and Loss A/c Dr
To Prior period expenses A/c Cr
( Transfer entry to P&,L A/c )

Such type of expenses you may not get deduction under Income tax Act .