I have 2 doubts:
- it is about sales recognition. About 3 months before the end of the fiscal year, a wedding dress maker received an order from a client. Before the end of the year the dress requested was completed and the invoice issued. However, the dress was collected/delivered around 2 weeks after the end of the fiscal period. Should the sale be accounted for in the period when it was completed or in the following one? For sales recognition purposes does it make any difference the fact that the dress was collected from the premises of the seller or delivered to the client? Finally, is there a different/specific period recognition policy for income or corporation tax calculation?
- it is about inventory. I know that to evaluate finished goods or works in progress I have to include in the valuation all the production costs incurred to manufacture the products. However, should also be absorbed part of the depreciation of the fixed assets (machineries) used to produce or not? And again, for tax purposes should this depreciation be included in the value of works in progress/finished goods? In other words, does HMRC allow that?