Recording a GST Reassessment
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?
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.