- This topic has 1 reply, 2 voices, and was last updated 8 months ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Restructuring provision
Sir if the restructuring provision cost is incorrectly then how this overstated expense and understand profit ?
The D/E for setting up ANY provision – i.e. to recognise a liability – is:
Dr Expense (e.g. wages and salaries)
Cr Provision (e.g. for redundancy settlement
If a provision has been recognised that should not have been recognised – e.g. it is not “de facto” a liability at the reporting date – expense is overstated – and hence profit understated.
The correcting journal will be to “write-back” the provision:
Dr Provision
Cr Expense