Tax consequences of deferred income
stefanboro
Registered Posts: 187 Dedicated contributor 🦉
This is a bit technical.
I know perfectly well how to account for deferred income - when you make a sale:
Dr Debtors (BAL SHEET ASSET)
Cr Deferred Income (BAL SHEET LIABILITY)
Then over the relevant time period leak the amount into the profit and loss:
Dr Deferred Income (BAL SHEET LIABILITY)
Cr Sales (PNL)
Fine and dandy.
Can anyone then point me in the direction to find the tax restrictions of this sort of accounting treatment. I am looking in BIM31000 but nothing jumps out at me.
Many thanks!
I know perfectly well how to account for deferred income - when you make a sale:
Dr Debtors (BAL SHEET ASSET)
Cr Deferred Income (BAL SHEET LIABILITY)
Then over the relevant time period leak the amount into the profit and loss:
Dr Deferred Income (BAL SHEET LIABILITY)
Cr Sales (PNL)
Fine and dandy.
Can anyone then point me in the direction to find the tax restrictions of this sort of accounting treatment. I am looking in BIM31000 but nothing jumps out at me.
Many thanks!
0
Comments
-
I don't know the chapter and verse, but my understanding is that if the general accruals concept is applied to income, such as deferred income, the tax treatment usually follows the accounting treatment.
Illustrated here
http://www.hmrc.gov.uk/manuals/bimmanual/BIM31090.htm
Do you have a specific scenario that differs from a "bog standard" deferred income situation?0 -
I'm with Monsoon.
Thought it was just taxed as normal in the year it takes place.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 324 NEW! Qualifications 2022
- 160 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 94 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 274 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership