I'm an industry accountant with the best part of 20 years experience.
I've just taken a job as a business analyst and part of my job is to construct the budgets.
I need to make a few changes to the management accounts/budgets etc and there are a couple of things that stick out imidiately as being allocated/presented wrongly in the P&L....
Firstly, directors loans that are being re-paid monthly - these are currently treated as Directors Drawings in the P&L - obviously, this is a movement of cash rather than a distribution of profit and so shouldn't be shown in the P&L at all.
Secondly, Interest received and accrued interest received - this is currently being shown as turnover in the P&L.....I'm not comfortable with this on the basis that the interest is generated as an indirect consequence of trading (specifically, it's generated from holding client monies). I would prefer to treat this as a reduction of financing costs. The same also applies to credit card fees charged to clients.
In both cases, I'm looking for some kind of guidance or ruling that states the correct treatment. I've tried googling it but I can't seem to find anything specific in either case.
I need to convince the directors and I'm just wondering which standard(s) would deal with these?......basically I need a piece of paper to prove my approach or they may well be considered to be a matter of opinion.
If anyone can point me in the right direction, that would be great.