Hi, as a newbie I'm still learning the ropes, so here's probably a very simple question and hopefully there's a simple answer.
When carrying invoices forward from the previous financial year to the current financial year (and inputting onto a new system), should they be dated as at the invoice date or as the first day of the current financial year?
For example I have an as yet unpaid invoice dated 1/12/09 but our financial year started 1/2/10. Which date should be put into the system?
I'll have a guess whilst you wait for a real answer, maybe it shows as an opening balance in you control and subsiduary dated at the begining of your financial year.
Sorry, you've confused me (not difficult in my case!).
Income and expenditure should be matched to the period to which it relates (one of the basic principles as per FRS18 Accounting Principles).
The payment received in the next financial period only serves as evidence of receipt but the recording of the invoice remains in the period during which it was created.
Any other treatment would be earnings management (per FRS5 Reporting the substance of transactions) and would serve to not present a true and fair view of the entities affairs as at the balance sheet date.
The amounts not received during the period are carried forwards in the debtors figure. You never change the date of the original invoice.
As I say, I probably misunderstood the question but hope that you find your answer in the above.
Kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
No, that's great thanks. The system wasn't set up by me and there are no opening balances so it's been a bit confusing but I'm getting there and your reply was a great help.
