4th Question , 3rd part about provisions.
Can you please help me understand the difference between provisions charged and utilised during the year ?
Ask the Tutor ACCA AAA
MARCH JUNE 2017
6y ago#1Charge (in accounting) generally means expense to profit and loss (for anything - e.g. depreciation), For any provision - say for goods sold with a warranty for repairs - it is the making of the provision by Dr P&L Cr Provision that "hits" profit. When the goods are then returned for repairs, the repairs incurred are not expensed - that would be "double counting" - the provision is used/utilised by Dr Provision (Cr Cash)
A provision can only be utilised (used up) for the purpose for which it was created.
Sign into reply to this topic.