Prior period expenses

Meaning

prior period items are income or expenses, which arise, in the current period as a

okk then what about treatment in Tax..

Prior period exp. are diallowed in Income tax. As per section 37,  exp. should be incurred in current year.

I hope so tax will be calculated after such adjustment.

(sorry this ans may be a wrong)

Okk then can u explain me in which year they are actually allowed??

It can be allowed in the year in which exp was actually incurred by way of revised return.

Prior period expenses are not allowed as deduction for income tax computation purpose.

but u said that they are disallowed while computing taxable income then how thay are allowed??? i didnt get it ??

Rakesh sir, 

i understood that they are added back to profit for the purpose of computing taxable income but ..i just want u know whether in any year can we avail the benefit of such expense if not in the current year??

Dear mam how can i show the expense in revise return which i actually didnt paid..As i pai

d the same in the current year

Suppose an exp. is incurred in F.Y. 2010-11 and it was omitted and not recorded in that year. And you record it in 2011-12, then exp. can be allowed in the year 2010-11 return.

U hav to book exp. on accrual basis, so u can Dr. in earlier year on accrual basis even if it is not paid..

I hope it solves your doubt...?

depends if prior period item is expense and u havent taken the deduction it will be deducted from p&l a/c..

and in accounts, if salaries is the peior period item then it will be

prior period salaries a/c ... dr

         to banka/c