Recording a GST Reassessment

by Michelle
(Canada)

Booking GST Reassessments

Booking GST Reassessments

How do you post this a reassessment from an audit where there is additonal GST owing in a prior year?


It is a credit or a liability? It can't be an expense as it relates to a previous year. How would you record this on your books?



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Hi Michelle,

Excellent question!


I would record the amount owing to your payable (a liability) with the offset to a current year expense account with a clear memo note explaining the entry. Here's why:

For tax purposes, anything booked to retained earnings, except dividends, will likely trigger an audit. Prior periods need to be restated if they are material. If they are not material, you just record them in your current year.

Then I have an Excel working paper that analyzes / tracks the entries by year.




P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Comments for Recording a GST Reassessment

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Jun 24, 2013
Concerning a balance owing for GST audit
by: Caroline

I am wondering about this entry ... I have the same question but not following the answer completely.

Is there a way to enter this GST amount that is owing from an audit, completely separate from the current period GST balances.

I would like to record and keep it separate. Perhaps create a separate liability account and track it that way?

Thank you.

Jun 26, 2013
Accounts Payable
by: Lake

Caroline, I suppose you could setup an Accounts Payable entry ... that would keep it separate ... and allow you to pay it separately.

Apr 04, 2016
GST Reassessment Mess
by: Andrea

Hello,

I have a same problem, but I am not following. So anything owed from reassessment is sort of payable,but not related to GST account or item at all? And then I can offset it by expense account, so I will expense it?

What happened to me is that I have recorded it as invoice to increase HST on sales and then I offset it with cheque, it balanced my bank and GST account itself, but not GST report. I actually have it as an 104 adjustment for 105 now.

Thanks for any kind of help.




Apr 11, 2016
Andrea
by: Lake

Sorry can't help you. I'd need to see the assessment notice to understand the reassessment before i could determine how to book it.

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