Hello all . Should I credit proceeds of a performance bond to the asset account as directly attributable "costs" or other income as the performance bond was insurance against loss of revenue. Your advise will be highly appreciated
19th Jul 2019
How to account proceeds of a performance bond
The performance bond is insurance against loss of income so proceeds should go to income?
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A lot more detail would help (circumstances, dates, amounts etc.)
Many thanks. The contract was for GBP 320k. A performance bond was given by contractor for 15.9k. the contractor went bust client managed to finish the project within budget. Issuing bank paid up the bond. Clients loss is revenue he could have earned had the project finished in time hope that helps.
Hello All
Any advise on accounting for performance bond proceeds.
Fellow Accountant in distress
The receipt is a revenue item.