Year - End Accrual Help

[Pauls]

Hi,

We will be placing orders with a contractor a couple of weeks before our year-end for remedial building maintenance work. The work will commence early in our new financial year and will be paid on completion.

As the goods will not be technically receieved until the new financial year, i assume this cost can't be accrued at the year-end based on the committed orders?

Thanks in advance

 

[kirby]

You are correct. You owe the contractor nothing until the contractor starts to work. So it follows that you have no expense to accrue in this year.

 

[Pauls]

You are correct. You owe the contractor nothing until the contractor starts to work. So it follows that you have no expense to accrue in this year.

Thanks Kirby