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Recording JRS Grant

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Hi there. 
 

thoughts please? In my company, we are eligible for the HRMC JRS grants. The payment we were meant to receive in August came into the bank on 1st September (possibly due to the bank holiday)

 

I have posted on my side as September and closed August month end but my MD (non finance) thinks I've done it wrong and should have posted the grant as August. He believes, irrespective of when it came into the bank, it relates to August and should be revignised as August. 
 

can I ask people's thoughts? I disagree as I said my bank statement wouldn't reconcile otherwise but at the same time, worried I will come across as difficult (I'm fairly new and still in my probation whilst he is my boss) 

 

please no mean comments! ;) 

Replies (11)

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By Wanderer
15th Sep 2020 10:08

Just accrue it at August month end.

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Replying to Wanderer:
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By ally1
15th Sep 2020 10:11

That’s what I wanted to do initially but as I had already closed August month end, I wanted to avoid that.

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By Duggimon
15th Sep 2020 10:17

Too bad! Your MD is right, put August income in August, the payment is either o/s on the bank rec or accrued.

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Replying to ally1:
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By Wanderer
15th Sep 2020 10:18

Think you were a little early then. No-one should be closing August by 1 September. There will almost always be further transactions that should be brought in for which the paperwork wouldn't be received by the 1st of the following month.

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By DJsy
15th Sep 2020 10:10

You're both right (in a way).

You should accrue for the income in August:
Dr Accrued income (a balance sheet receivable account)
Cr Income

You should account for the cash when it arrives in September:
Dr Bank
Cr Accrued income

Your bank will still reconcile but you'll also show the income in the correct period.

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Replying to DJsy:
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By ally1
15th Sep 2020 10:24

Thanks. I think my MD thinks if I record the grant in August, it will boost the P&L! It’s looking a little low this month (understandable due to the economy and the industry) but he thinks it will help boost the figures! ;)

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By Wanderer
15th Sep 2020 10:32

He'd be right.

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By SBS33
18th Sep 2020 12:19

On second thought there is another way to deal with it....

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Replying to SBS33:
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By DJsy
18th Sep 2020 11:15

SBS33 wrote:

The grant should be recorded as 'other income' and therefore not affect the trading P & L....

No it shouldn't be "other income". It forms part of Revenue under FRS102 and should be stated as a grant in the revenue note to the accounts.

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By tom123
15th Sep 2020 10:26

I agree with PP.

By all means close the cash book on day 1 - I like to do that, ideally with no uncleared items.

However, you cannot realistically have sorted accruals and prepayments on the same day, as these depend on invoices you do or do not receive, dated in the month under review, in the early part of next month.

Some organisations that really want 'fast close' tend to estimate prepayments mid month - but this needs to be with the understanding that you are trading speed for accuracy.

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By tom123
15th Sep 2020 10:27

I would (and have) definitely want to find a way to incorporate each grant into the month to which it relates.

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