Hi all,
Just to clarify to my understanding under IFRS standard for prepayment. Prepayment is expenses that has been paid but has not incurred during the year. My company has been invoiced on 1st December 2022 for future expenses in year 2023 by a supplier.
Should I book this in FY2022 book? If I don't, then it won't tally to the supplier' Statement of Account.
Invoiced for future expenses
Re: Invoiced for future expenses
There isn't really a standard for prepayments.
What do you mean by 'future expenses'.? You've paid the invoice already, great, so are you saying the services you paid for are not yet rendered? So you've paid a deposit or 'on account' payment. Do you get it back if those services never get provided?
What do you mean by 'future expenses'.? You've paid the invoice already, great, so are you saying the services you paid for are not yet rendered? So you've paid a deposit or 'on account' payment. Do you get it back if those services never get provided?
Re: Invoiced for future expenses
in general, prepayments are intangible assets in the scope of IAS 38, they are rights to receive goods or services in the future
https://ifrscommunity.com/knowledge-bas ... d-expenses
if the supplier had a contractual right to issue an invoice in Dec 2022 then you have a liability that needs to be recognised too (even if the services will be provided in 2023)
https://ifrscommunity.com/knowledge-bas ... d-expenses
if the supplier had a contractual right to issue an invoice in Dec 2022 then you have a liability that needs to be recognised too (even if the services will be provided in 2023)
Re: Invoiced for future expenses
Sorry for the confusion. It's not paid yet, the invoice is provided early.JRSB wrote: ↑05 Jan 2023, 15:29 There isn't really a standard for prepayments.
What do you mean by 'future expenses'.? You've paid the invoice already, great, so are you saying the services you paid for are not yet rendered? So you've paid a deposit or 'on account' payment. Do you get it back if those services never get provided?
So it's to be booked regardless even it is not paid yet?Marek Muc wrote: ↑05 Jan 2023, 15:40 in general, prepayments are intangible assets in the scope of IAS 38, they are rights to receive goods or services in the future
https://ifrscommunity.com/knowledge-bas ... d-expenses
if the supplier had a contractual right to issue an invoice in Dec 2022 then you have a liability that needs to be recognised too (even if the services will be provided in 2023)
Re: Invoiced for future expenses
It doesn't matter whether it was paid or not.
Did the supplier have right to invoice you in December? Was it in line with contractual terms?
Did the supplier have right to invoice you in December? Was it in line with contractual terms?
Re: Invoiced for future expenses
Yes, they actually have.
Thank you.
Thank you.