Capitalise Accrued Expense

Can an accrued invoice be capitalised in the following financial year?

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I have an invoice where in the prior finanical year a purchase order accrual was made for the goods as an expense, these goods have now been idenitifed as being part of a larger project which has been capitalised. As the accrual reverses out in the expense account in the current financial year, my question is, can the invoice still be moved to the fixed asset code and depreciated?

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By D V Fields
11th Apr 2024 19:17

If you genuinely cannot correct in the prior year then there is no reason why you couldn’t do as you wish in the current year if that was its correct treatment.

The accruals should have been based upon receipt of goods at year end not just the raising of the order.

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