Payables are something you owe to your suppliers, employees, and so on, and why not your customers in certain circumstances. As such, on the balance sheet, they are recognized under liabilities.\u00a0<\/p>\n
However, the question is, when exactly should you recognize one on your financial statements? Quite literally the time is tied with the time the obligation was taken in the eyes of others (mostly the party the payable is against).<\/p>\n
For an example, on the day you announced you would pay out bonuses and the amount is certain (i.e. the basis has been determined), you account for the bonus obligation. Another example is signing an agreement with your supplier to buy certain goods. It\u2019s not the date you signed the agreement, but the date you get the invoice for the goods you account for the payable. The date of the invoice is when your supplier expects you to pay a certain amount to them.<\/p>\n
More or less the time you recognize a payable on your balance sheet is the date you took the obligation, either in the eyes of the regulators (i.e. taxes), employees or with invoices received for goods and services received.<\/p>\n","protected":false},"excerpt":{"rendered":"
Payables are something you owe to your suppliers, employees, and so on, and why not your customers in certain circumstances. As such, on the balance sheet, they are recognized under liabilities.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,80],"tags":[],"class_list":["post-4114","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-10-purchases-and-payables"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t