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Prior period expenses

Knowledge Sharing 260 views 1 replies

I work in a Diplomatic Mission. In the year 2017, one of the staff member availed LTC for himself and his spouse. Due to some unavoidable circumstances, his spouse didn't come back from hometown. The LTC was settled in the year 2017 with the payment of half way journey. The accounts have been audited, but no observation was made regarding uncompleted journey of employee's spouse. Now the matter has invoked and as per rules LTC can be reimbursed only when employee and family members complete both way journey.

In order to settle the accounts, Organization is considering to invoke another rule in which one way journey ticket is provided to the officer and his family members at the time of relinquishing the post. The officer is retiring in 2019. My question is, can we adjust that one way journey took place in 2017 in the year 2019 under prior period expenses or any other solution of this matter.

Please note the officer is exmpted from payment of income tax.

Kindly advice...

Replies (1)

Prior period items are those which was not recorded due to some error in accounting or event

Since here is no error so you may book it as normal expense in current year specifying in narration that it pertains o previous year


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