Refunded fraud after year end

Refunded fraud after year end

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A client noticed several fraudulent transactions on bank statement - to various airlines for a material amount. He queried this with his bank, who made enquiries, decided that the transactions were fraudulent and were not my client's fault, and refunded the money. However, the money was only refunded after YE.

Where should these fraudulent entries appear on the accounts? As a debtor, or on the P&L with a corresponding reversal the next year? If so, I assume it would be disallowed for tax relief, rather than tax relief taken, and a corresponding "taxable income" received in the following year?

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By Mouse007
03rd Jun 2012 19:53

Debtor

You know the amounts were recovered after the year end, hence no need to write off to P&L.

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By User deleted
04th Jun 2012 08:44

Did you expense out the fraudulent payments originally, the previous year??

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Replying to Tornado:
By aiwalters
04th Jun 2012 09:35

maybe

taxguru wrote:

Did you expense out the fraudulent payments originally, the previous year??

Didn't do anything yet. Still preparing the accounts for the "previous year".

Not sure about putting it in Debtors; at YE there was far from certainty that the "debt" would ever be recovered.

 

 

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Replying to anthony stevens:
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By User deleted
04th Jun 2012 09:55

'Post event' it has been recovered, so it should go to 'Debtor'.

 

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By aiwalters
04th Jun 2012 12:21

thanks

taxguru and mouse

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