Say that you’ve given your clients the right to return their goods subject to conditions. When those conditions are met, some of them use the right. It’s one thing what you do with the goods, another how you account for the returning of the goods in your financial statements. Continue reading
Author Archives: Karl
Sales tax
Sales tax is something you’re most likely obliged to pay to your local authorities for the sales you’re making. It’s usually a fixed rate for types of goods and services, i.e. in some countries food and essentials have lower rates and luxury items may be subject to higher sales tax rate. Continue reading
Dealing with stock count differences
Stock count differences occur, that’s part of the nature of the inventories and the procedure – to identify if any of the positions differ from the physical count.
It’s what you do with the results afterwards that matters. Continue reading
Using the completion method for calculating revenues
Provided you’re rendering services under a specific contract over a longer period of time, your sales revenue should also be spread over this same period.
If the service is constant meaning that the content and volumes do not differ from month to month, the revenue could be equally measured to the months. That is if from March 2013 until March 2014 you’re providing a monthly service with an annual fee, each month 1/12 of the fee should be recognized to your sales revenues. Continue reading
“Risk free” cost price for inventories
Something I have come across is an opinion that the inventories are recorded in a “risk free” price if you don’t add any overheads, payroll, depreciation or additional materials used in the production to the unit price and let it just be in its base material expense. Continue reading
Information that comes available after year-end but before submitting the Annual Report
I don’t know why accountants think that if the year is closed, it’s closed. It has happened quite often that I have to explain that if the information becomes available after the year-end but before you’ve submitted the Annual Report, this information is to be included within if it’s relating to the previous year.
It’s not only to be included within the report, but also in the financial statements if need be – depending on the information that become available. Continue reading
Fixing an asset does not make the expense eligible for capitalizing
Every now and then your assets may need service, maintenance and even some fixing. While it makes sense for the service and maintenance to be part of your running expenses, for some reason accountants consider fixing to be part of capitalized cost of the asset. Why? Continue reading