Appropriation
golden
Just JoinedRegistered Posts: 2
Please can someone give me an accurate way of calculating appropriation of expenses on income.
1st Example:
Insurance that covers a year but crosses over tax years. It cost £229 for a year payable on Feb 2nd with year end is same a tax yr on 5th of April so bill needs to be appropriated over 2 tax years. What is the calculation to show how much of the bill is due for each tax yr?
2nd Example:
Income of rent for one month of £785 from 17th of March goes into second tax yr starting on the 6th of April. What is the calculation to show how much is owed to year when it is paid and the part of the month into the second tax yr?
I have trawled through the AAT to find this calculation but found nothing.
Thank you
1st Example:
Insurance that covers a year but crosses over tax years. It cost £229 for a year payable on Feb 2nd with year end is same a tax yr on 5th of April so bill needs to be appropriated over 2 tax years. What is the calculation to show how much of the bill is due for each tax yr?
2nd Example:
Income of rent for one month of £785 from 17th of March goes into second tax yr starting on the 6th of April. What is the calculation to show how much is owed to year when it is paid and the part of the month into the second tax yr?
I have trawled through the AAT to find this calculation but found nothing.
Thank you
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Best Answer
Answers

Thank you PeterC
I have been doing it correctly but not in such a straight forward way.
So many say you divide by 365 but when it is a division of one months rent I do example 2 and kept wondering if this was OK even though in my mind it was a straight division between the amount of days in the month period for each tax yr of that months rent.
What surprises me more is that if you google appropriating bills and expenses nothing comes up. Is the word appropriating old fashioned and now just seen as prepayment and accruals? I google that and it didnt give me this equation either though.
It is helpful to have the clarity that I have been doing it correctly all along.
Many thanks0 