UK Help with recognising sales in the correct period

[Richard Matthews]

Little help required - if I am made aware about some additional revenue in February for example, that actually related to a prior financial year, but the revenue was only confirmed by the client in Feb... should a prior year adjustment be made in the previous year's accounts? Or can the income be recognised in Feb for ease?

 

[Fidget]

As usual, it depends. The general gist of these situations whether it be income or expenses that crop up relating to a prior year, is whether or not the amount is material. If material, then restating is required, if not, then just recognise in current period. To gauge whether or not it's material, the question is purely one of "would anybody have viewed the affected accounts differently had this amount actually been in them?". If yes, then it's material, if no, then it's not.

 

[Richard Matthews]

Fidget, many thanks for your help on this. Much appreciated