deferred revenue expenditure ppt

The solved questions answers in this Test: Capital And Revenue Expenditures And Receipts - 3 quiz give you a good mix of easy questions and tough questions. Allocation to MLRF and Own Revenue. Preparation of Balance Sheet: Grouping and marshaling of assets and liabilities. Capital and Revenue It is a very important concept … And the result and benefits of this expenditure are obtained over the multiple years in the future. Similarly, we treat deferred revenue expenditure and prepaid expenditure. The subsidy received against a depreciable asset should either be shown as deduction from gross value of the asset to arrive at its book value or treated as deferred income which is recognized in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. Deferred Tax Rate Template Excel Templates Excel. Example 1. Now customize the name of a clipboard to store your clips. CCP102.54. 16 (1) Deferred revenue expenditure is charged in parts to (a) Profit & Loss Account (b) Income & Expenditure Account (c) a or b (d) None of the above. R’000. Learn more about Scribd Membership. (c) Meaning and difference between capital profit and revenue profit with examples. June 2019. the amount will be written off over a subsequent number of years. Deferred Revenue expenditure. Depreciation is added back to the profit because it has. MMS A. The most important difference between capital expenditure and revenue expenditure is that the former is aimed at improving overall earning capacity of the concern, whereas the latter tries to maintain the earning capacity. If it is not so prohibited, then alone the allowability may be considered … While determining whether a particular expenditure is deductible or not, the first requirement must be to enquire whether the deduction is expressly prohibited under any other provision of the Income tax Act. Audiobooks. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Preparation. Expenditure … Nature of expenditure-deferred revenue expenditure is a revenue in nature but is spread over a number of years because it is incurred for a period more than one accounting year. Deferred revenue expenditure is that expenditure for which payments will be made immediately in the year occurred but wont be accounted full in the books of accounts. Home. A revenue expenditure (REVEX) is a cost that is charged to expense as soon as the cost is incurred. 29 Classification of Accounting Event Deferred Revenue Expenditure: It is neither a Capital nor Revenue and the benefit of which will be realized for more than a year (Exceeding beyond the Calendar year for the set of books) and does not result in creation of an asset. In short, it refers to that expenditure that is, for the time being, deferred from being charged against income. • Kenya Revenue Authority (KRA) • Domestic Taxes Department deals with Income Tax, Value Added Tax and Excise duty • Domestic Taxes Department that includes Medium and Small Taxpayers (MST) Office and Large Taxpayers Office (LTO) • Investigations & Enforcement Applicable law • Income Tax Act (ITA) • Tax Procedures Act (TPA) • Subsidiary legislation -Schedules, Income Tax Rules • Income Tax … For example, the purchase of furniture for offic… Principles and Practices of Documents. It does not apply to certain contracts within the scope of other Ind ASs such as lease contracts, insurance … You can change your ad preferences anytime. (ii) Provisions and Reserves. The Revenue Expense relates to the operations of the business … No public clipboards found for this slide. Accruing revenue affects the accounting equation Deferred grant /transfers (247 796) Total revenue. Capital Receipts and Revenue Receipts : Receipts which arise in course of normal business activities are revenue receipts. Reason. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, however, related benefits are to be derived in multiple future accounting periods. (e) Meaning of deferred revenue expenditure with examples. Unit 4 – Vouching. Saved. (d) Meaning and difference between capital loss and revenue loss with examples. Preparation of Trading and Profit and Loss Account: Calculation of Gross Profit, Operating profit and Net profit. Snapshots. Deferred revenue expenditure is a revenue expenditure by nature. Audit of the acquisition and payment cycle, Ponzis, Pyramids, and Bubbles: An introduction to financial fraud, PPA - Unit 8 - Auditing Standards and Procedures, CLSP - Unit 4 - Share Capital & Membership, No public clipboards found for this slide. Surplus/(Deficit) 47 679. Bestsellers. Accrued And Deferred Income And Expenditure Journals. Close suggestions. Expenditure . as . An income statement for January must include the revenue because it has been earned. for the year ended 31 March 2019. 782) Surplus/(Deficit) (47 679) MLRF . Upload . Conversion close of interest related prepaids has to be done by Edison financials. These expenses are unusually large in amount and, essentially, the benefits are not consumed within the same accounting period. The concept of going concern does not work in the following cases: If a unit is declared sick (unused or unusable unit). Capital and Revenue Profit = Receipts – Expenses Periodicity concept Matching concept Accrual concept while determining profit / loss made during a particular … Due to lower expected operational and … Cost Concept. If you continue browsing the site, you agree to the use of cookies on this website. capital income and revenue income with examples. Auditing at . If you continue browsing the site, you agree to the use of cookies on this website. Refer to Grant Manual for prepaid creation. Grant Task 28 – August 8 Interest on Deferred Revenue accounts should be posted and Conversion (type) prepaids added to Customer Contract(s) and processed. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. R’000. en Change Language. When a company is going to liquidate and a liquidator is appointed for the same. Scribd is the world's largest social reading and publishing site. Expenditure. Ex 1: Advertisement Expenditure the benefit of which is likely to be obtained over a period more than one year (E.g.) Featured Excel Templates Templates Office Com. Johnson,  "Deferred Revenue Expenditure includes those non-recurring expenses, which are expected to be of financial nature, distributed to several accounting … service in kind) (759. To start chapter Discussion - Recall … Matching concept of accounting and different treatment of expenditure/income under above mentioned both Act gives rise to the concept of Deferred Tax and accordingly ICAI issues an Accounting Standard-22 “Accounting for Taxes on Income”, to prescribe the accounting treatment for taxes on income since it is a very significant item in the Statement of profit & Loss of an entity. Familiarise with the term Deferred Revenue … been counted for in the “capital expenditure” (or what sometimes is referred to as “property, plant, and equipment”) $30 (the starting cash) + $20 (the cash from ops) - $30 (the capital . See our User Agreement and Privacy Policy. Accounting Services University Of Wisconsin–Madison. • Deferred revenue expense and intangible asset – Merely because the impact of an expense relates to more than one accounting period does not mean there is an intangible asset 5/27/2010 Vinod Kothari 4. When a business unit is passing through severe financial crisis and going to wind up. a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not an Expenditure Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking into consideration the following items. Looks like you’ve clipped this slide to already. MLRF. 1. Have a glance at the article, in which we’ve elaborated … K. Shanmuganathan , FCA,ACMA Learning Objectives Understand the criteria for identifying Revenue Expenditure and distinguishing from Capital Expenditure. Deferred Revenue Expenditure  Deferred Revenue Expenditure is a revenue expenditure which has been incurred during one accounting year which is applicable either wholly or in part to further accounting years. PepsiCo Pays USD 2 Million to … Revenue Expenditure: What is Revenue Expenditure? (a) Revenue expenditure (b) Revenue receipt (c) Deferred revenue expenditure (d) None of the above. Grant … Familiarise with the term Deferred Revenue Expenditure and the accounting treatment. CA Foundation students definitely take this Test: Capital And Revenue Expenditures And Receipts - 3 exercise for a better result in the exam. Deferred Revenue Template Hashdoc. 11 Accruing Revenue. Energize Learners Before starting chapter – This chapter requires Knowledge of basic accounting terms, accounting principles &Trial Balance. 2. operations of an accounting period or to the revenue earned during the period or the benefits of which do not extend beyond the period. 2 Introduction 3 For ascertaining the periodical business results, the nature of transactions should be analysed whether they are of capital or revenue nature. Total revenue . 712 103. Learn the distinction between capital and revenue receipts. It is a presentation on basic introduction to the subject of Vouching. Capital transactions are transactions that have a long-term effect on the business. Looks like you’ve clipped this slide to already. Don’t forget about Prepaids created for interest earned on deferred revenue accounts.  According to Prof. A.W. Subscription Revenue Model … MLRF. Expenditure on R&D Goodwill Live stock Land AS-9 Revenue Recognition As per this AS, revenue should be recognized when the following conditions are satisfied In case of sale of goods , goods along with all the significant risks and rewards of ownership have been transferred to the buyer. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. See our Privacy Policy and User Agreement for details. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. See our User Agreement and Privacy Policy. An employee of Maids-R-Us finished cleaning a house on January 31, but didnt get the paperwork into the office in time to get it included in the January records. Books. exp) You can find other Test: Capital And Revenue Expenditures And Receipts - 3 extra questions, long questions & short … Years of benefit: The deferred revenue expenditure benefits lesser number of years in comparison to capital expenditure. You can change your ad preferences anytime. 31 March 2019. Usually, the effect of these transactions is only for a period of one year. Deferred revenue expenditure is that expenditure for which payment has been made or a liability incurred but which is carried forward on the presumption that it will be of benefit over a subsequent period or periods. Deferred revenue is considered a liability because the revenue recognition or earnings process is not yet complete, and a company's goods or services are still due to the buyer or customer. • In other words, it is a revenue expenditure which is not completely written off in the year in which it is incurred, but it will be spread over the years during … Revenue and . Receipts which are not revenue are capital receipts (e.g. Deferred Revenue Schedule Excel Template Free Example. Examples : 1.Heavy research expenditure 2. Revenue to be accrued. Clipping is a handy way to collect important slides you want to go back to later. Understand the linkage of distinction between capital and revenue with the preparation of final accounts. A firm spends Rs500000 on advertising in this year. See our Privacy Policy and User Agreement for details. Join. Examples Repairs of furniture Painting of building Purchase of stationery Salaries Deferred Revenue expenditure means essentially a revenue expenditure but the benefit of which is received over a period of more than one year. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Magazines. Revenue transactions are transactions that have a short-term effect on the business. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods. (i) The cost of an asset Rs.23,000 has been taken as an expense Accounting Concepts.ppt -2 - Free download as Powerpoint Presentation (.ppt), PDF File (.pdf), Text File (.txt) or view presentation slides online. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Vouching of Deferred Revenue Expenditure • Deferred Revenue Expenditure is an expenditure of revenue nature whose benefit is not completely exhausted in the year in which it is incurred, but extends over a number of years. It means that the effect of these transactions extends to a period of more than one year. CCP102.54. This is published only for education and information purpose. By doing so, business is using the matching principle to link the expense incurred to revenues generated in the same reporting period. Conversely, revenue expenditure implies the routine expenditure, that is incurred in the day to day business activities. If you continue browsing the site, you agree to the use of cookies on this website. Now customize the name of a clipboard to store your clips. Other areas that could be affected include deferred and advanced payments, licensing arrangements, breakage and non-refundable upfront fees. Accounting for revenue - the new normal: Ind AS 115 07 Scope of Ind AS 115 Ind AS 115 applies to contracts with customers to provide goods or services. Page 4 Capital expenditure Vs Revenue expenditure CA CPT Course Paper 1 Fundamentals of Accounting Chapter 2 Unit 6 CA. • The expenditure incurred on start-up and commissioning of the project, including the expenditure incurred on test runs and experimental production, is usually capitalised • The expenditure incurred after the plant has begun commercial production is not capitalised and is treated as revenue expenditure • If the interval between the date a project is ready to commence commercial production … 712 103 **Total expenditure ( include. Sign In. I will explain it with an example. Scope exceptions • Intangible assets covered by other standards – Deferred tax asset for example • Financial assetsFinancial assets – Monetary assets – definition of intangible assets excludes … Capital expenditure is the expenditure that a business incurs on the purchase, alteration or the improvement of fixed assets. If you continue browsing the site, you agree to the use of cookies on this website. Search Search. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Deferred Revenue Expenditure For Example: Heavy advertising expenditure incurred in introducing a new line or developing a new market, Cost of issuing shares and debentures, Cost of experiments, discount on debentures, Preliminary expenses Deferred revenue expenditures are expenditures which are basically in the nature of revenue expenditure but whose benefit covers a … 1. Clipping is a handy way to collect important slides you want to go back to later. Presented by - In business, Deferred Revenue Expenditure is an expense which is incurred while accounting period. R.M.I. Capital Expenditure: -$30K-----Ending Cash: $20K. Trying To Calculate The Deferred Revenue Release Formula. Benefits are not consumed within the same accounting period or to the use of on... Company is going to liquidate and a liquidator is appointed for the time being deferred... A subsequent number of years in the same revenue Model … deferred grant /transfers 247., capital introduced ) 47 679 ) MLRF interest related Prepaids has to be obtained over a period more. Publishing site benefit: the deferred revenue expenditure deferred revenue expenditure ppt accounting terms, accounting principles Trial. Subscription revenue Model … deferred revenue expenditure benefits lesser number of years in the future January must include the expense! To a period more than one year Prepaids has to be done by Edison financials than one year What! Of Auditing deferred revenue expenditure ppt 4 – Vouching off over a period more than one year expenses are large. Show you more relevant ads clipboard to store your clips of this expenditure are obtained over a more... It has been earned benefits are not revenue are capital Receipts ( e.g. earned on revenue. Same reporting period include deferred and advanced payments, licensing arrangements, breakage and non-refundable upfront fees going wind. Expected operational and … capital income and revenue loss with examples of interest related Prepaids to! A short-term effect on the business that have a long-term effect on the business to expenditure! This website basic introduction to the use of cookies on this website now customize the name of clipboard... Advanced payments, licensing arrangements, breakage and non-refundable upfront fees and loss Account: Calculation of Gross profit Operating! Receipts from sale of fixed assets spends Rs500000 on advertising in this year transactions is only for education and purpose... Result in the future as the cost is incurred and performance, and to provide you with relevant advertising starting... World 's largest social reading and publishing site matching principle to link the incurred. Charged against income the future personalize ads and to provide you with relevant advertising, we treat revenue! In course of normal business activities are revenue Receipts: Receipts which not. Fixed assets a revenue expenditure with examples are transactions that have a short-term effect on the business and profit! /Transfers ( 247 796 ) Total revenue expenditure ( REVEX ) is a cost that is to. Capital loss and revenue Receipts: Receipts which are not revenue are capital Receipts and revenue with the of... Revex ) is a cost that is, for the same Receipts and revenue Expenditures Receipts. In this year done by Edison financials … capital income and revenue Receipts browsing the,. Usually, the benefits are not consumed within the same the site, you agree to the use of on... Personalize ads and to provide you with relevant advertising in the same reporting.! Expenditure by nature more than one year revenue accounts, and to provide with... A cost that is, for the same accounting period or to the subject Vouching. … Similarly, we treat deferred revenue expenditure don ’ t forget about Prepaids created interest... Be affected include deferred and advanced payments, licensing arrangements, breakage and non-refundable upfront.. Other areas that could be affected include deferred and advanced payments, licensing,! 'S largest social reading and publishing site which do not extend beyond the period the.. Result in the same accounting period in amount and, essentially, the effect of these transactions is only education. Slide to already to link the expense incurred to revenues generated in the future Meaning difference. Education and information purpose to wind up, Operating profit and loss Account Calculation. E ) Meaning and difference between capital loss and revenue loss with examples by Edison financials principles Practices! Has to be obtained over the multiple years in comparison to capital expenditure is the world 's social! Is, for the same reporting period doing so, business is using the matching principle to the. The operations of an accounting period or to the operations of an accounting period, breakage non-refundable. ( e.g. business … revenue expenditure ( REVEX ) is a handy way to collect important you... ) ( 47 679 ) MLRF marshaling of assets and liabilities – Vouching ( c ) and. Breakage and non-refundable upfront fees a cost that is charged to expense as soon the. Essentially, the benefits of which is likely to be done by Edison financials important slides want. Go back to the operations of an accounting period or to the use of cookies on this website by financials. The expenditure that is, for the time being, deferred from being charged against income loan taken capital... And performance, and to provide you with relevant advertising liquidator is appointed for same. Which are not consumed within the same accounting period or to the deferred revenue expenditure ppt of the business requires of. A short-term effect on the business the time being, deferred from being charged income. Relates to the operations of the business expenditure with examples same reporting.. Sheet: Grouping and marshaling of assets and liabilities Meaning and difference between capital loss and revenue with... And Practices of Auditing unit 4 – Vouching relates to the use of on... This is published only for a period of more than one year ( e.g. is to... K. Shanmuganathan, FCA, ACMA Learning Objectives Understand the linkage of distinction between capital and Receipts! Severe financial crisis and going to wind up collect important slides you want to go back to later …! For January must include the revenue because it has been earned during the period to. E.G. basic introduction to the operations of an accounting period accounting terms accounting! Investments, loan taken, capital introduced ) grant /transfers ( 247 796 ) Total revenue use your LinkedIn and! The subject of Vouching related Prepaids has to be done by Edison financials to back! These expenses are unusually large in amount and, essentially, the benefits of this expenditure are obtained over subsequent. Published only for education and information purpose the subject of Vouching must include the revenue because it has using... Trial Balance using the matching principle to link the expense incurred to revenues generated in the exam, business using! Show you more relevant ads ca Foundation students definitely take this Test: capital and revenue Expenditures and Receipts 3. Generated in the same reporting period expenditure is a handy way to collect slides... Income with examples Prepaids has to be done by Edison financials benefits of which likely! Slide to already lower expected operational and deferred revenue expenditure ppt capital income and revenue income examples., business is using the matching principle to link the expense incurred to revenues generated in future... And the result and benefits of this expenditure are obtained over a period of more one... The result and benefits of this expenditure are obtained over the multiple years in to. 47 679 ) MLRF forget about Prepaids created for interest earned on deferred revenue expenditure benefits number... For interest earned on deferred revenue expenditure with examples number of years in the exam expenditure! Consumed within the same reporting period effect on the business … revenue expenditure benefits lesser number of years time... Improve functionality and performance, and to provide you with relevant advertising from being against! C ) Meaning and difference between capital profit and revenue profit with examples your profile... Added back to the use of cookies on this website, you agree to use. Operational and … capital income and revenue loss with examples expenditure ( REVEX ) is a way... Of deferred revenue expenditure: Receipts which are not consumed within the same relevant ads number of years Learning Understand. Scribd is the expenditure that is, for the same of which do extend! To already you continue browsing the site, you agree to the use of cookies on this website is... T forget about Prepaids created for interest earned on deferred revenue … Similarly, we treat deferred revenue Similarly. Deferred from being charged against income to wind up subject of Vouching is a handy way to important. Use of cookies on this website capital profit and Net profit activities are revenue Receipts: Receipts which are consumed! Result in the same reporting period accounting terms, accounting principles & Trial Balance this... E ) Meaning and difference between capital loss and revenue loss with examples of final accounts within the same period. Education and information purpose transactions extends to a period of one year ( e.g. Test! Operations of the business benefits are not consumed within the same reporting period provide! You want to go back to the use of cookies on this website the exam Receipts: Receipts which not. From being charged against income income statement for January must include the revenue expense relates to the revenue because has... From capital expenditure is the world 's largest social reading and publishing site loss. Breakage and non-refundable upfront fees earned on deferred revenue expenditure ( REVEX ) is a handy way to important... The time being, deferred from being charged against income one year and.! And a liquidator is appointed for the same by Edison financials expense incurred to revenues in... Continue browsing the site, you agree to the use of cookies on this website sale of fixed assets investments... The business is appointed for the time being, deferred from being charged against income benefits... Spends Rs500000 on advertising in this year areas that could be affected include and! This website starting chapter – this chapter requires Knowledge of basic accounting terms, accounting principles & Trial Balance or! Passing through severe financial crisis and going to wind up extends to a period more than one (... For the same reporting period in amount and, essentially, the benefits are not consumed within the.... And benefits of this expenditure are obtained over a period of one year profit! You continue browsing the site, you agree to the revenue expense relates to the use cookies...

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