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Creditors on the balance sheet

Creditors on the balance sheet

how do i treat creditors from last year who have not or will not be paid this year on the balance sheet and P&L. where do the ones who will be paid in the next financial year go and what about creditors who do not require payment for any reason?



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22nd Jan 2013 14:21


A 'creditor who does not require payment' is not a creditor.

Amounts that are payable in the next financial year go under Current Assets>Creditors due within one year.

Amounts that are payable after that go under Creditors due after one year (After Net Current assets, before Total Assets'

Thanks (1)
By penny
to stepurhan
22nd Jan 2013 14:44


Thanks i do not think i have explained myself too well. sorry! 

On the balance sheet from last year was an amount of £1000 under creditors. A supplier was due £1000 from our company and therefore on the balance sheet as a liability falling due within one year. However, over the past year that supplier has ceased trading and not looking to claim any money from us therefore is not requiring any payment. So how do i treat this on the balance sheet? Do i put this as a debit in the profit and loss uner direct costs as they were a purchase as they are no longer a liability? Or is there somewhere else it should Thanks

Thanks (0)
22nd Jan 2013 15:08

Pass it back through the P&L

It should be passed back through the P&L. It could be shown as a special item so as not to confuse any gross margin comparatives etc, although the amount may be immaterial so that is not essential.

The entry would be to debit creditors in the balance sheet and credit the P&L




Thanks (1)
23rd Jan 2013 11:46

Don't forget to account for the Input VAT reversed

if not already accounted for.

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