The business is courier business and the parking fine was for the vehicle that is used in this business. I know fines are not allowable expenses. But I want to record it and then add it back to income.
I have a parking ticket that have been issued on 04.04.2013.
I have paid it today 31.05.2013
Which tax year should I record the transaction in my accounts ? 6 April 2012 - 5 April 2013 or 6 April 2013 - 5 April 2014
And also, if I may add:
1. this applies to all income and expenditure ?
2. Do I have to record the money when they are actually in or out from the bank (paid) or when they are written on the invoices or other docs (incurred I think it is called) ?
I know I have this in my studies somewhere and I will look for it as I want to review every bit of my AAT information, but please help me if you can.
Many thanks,
Adrian
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This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.
P.S. I only ride a motorbike because I want to dry my clothes faster
Doing it properly, things should be recorded in the period to which they relate (when they are incurred), not when they are paid so the parking fine (which you rightly identify is not a legitimate expense) relates to 2012/13 so should be recorded in that year as an accrual...
The financial reporting standard that you need to read is IAS18 Revenue (and also have a read of IAS37 Provisions, contingent liabilities and contingent assets) (#1).
Have a look at the IASB website for the standards. You may need to sign up for a free account to read the standards in original rather than shortened form.
Note the use at the start of this reply that I say "doing it properly". There are times when materialarity make some minor entries (i.e 2p interest) a no never mind.
Anything other than clearly trivial expenditure or income would be considered earnings management.
kind regards,
Shaun.
(#1) under UKGAAP refer to FRS5 (specifically application note G) and FRS12
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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.
Sorry Chris, crossed in the post. My response was to Adrian rather than yourself.
As you say, the case in question dosn't really make a lot of difference but just trying to instil the more fundamental principles and knowledge in Adrian as he is only just starting out.
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.
