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Hello, kindly assist in answering the following:
1. A company’s financial year runs from Jan to Dec 2012. If an invoice is issued in Nov 2012 and a credit note was issued for part of that same invoice in Jan 2013, what period should the credit note be recorded?
2. A company’s financial year runs from Jan to Dec 2012. If an invoice is issued in Oct 2012 and a credit note was issued in Nov 2012 but not towards a specific invoice, what period should the credit note be recorded?
1 I would say it depends on why the Cr note is issued. If the sale were speculative ie like goods on sale or return, the credit note would be an adjusting event because is is evidence that teh sale did not really exist at year end. If, however,the sale was a full sale, but int January the customers decided that the goods were not required and, to keep good relations going we decide to take tham back, the it is non-adjusting.
Note that before any disclosure has to be made the amount woudl ahve to be material.
2 I can’t see a problem here. Eveything happened in 2013 so would be in those FS.
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