Total revenue . Clipping is a handy way to collect important slides you want to go back to later. Preparation of Trading and Profit and Loss Account: Calculation of Gross Profit, Operating profit and Net profit. 782) Surplus/(Deficit) (47 679) MLRF . By doing so, business is using the matching principle to link the expense incurred to revenues generated in the same reporting period. … Auditing For example, the purchase of furniture for offic… Examples Repairs of furniture Painting of building Purchase of stationery Salaries Deferred Revenue expenditure means essentially a revenue expenditure but the benefit of which is received over a period of more than one year. MLRF. When a business unit is passing through severe financial crisis and going to wind up. Capital Receipts and Revenue Receipts : Receipts which arise in course of normal business activities are revenue receipts. Other areas that could be affected include deferred and advanced payments, licensing arrangements, breakage and non-refundable upfront fees. The Revenue Expense relates to the operations of the business … 2. exp) Subscription Revenue Model … a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure d) Not an Expenditure Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after taking into consideration the following items. Don’t forget about Prepaids created for interest earned on deferred revenue accounts. R.M.I. (c) Meaning and difference between capital profit and revenue profit with examples. Vouching of Deferred Revenue Expenditure • Deferred Revenue Expenditure is an expenditure of revenue nature whose benefit is not completely exhausted in the year in which it is incurred, but extends over a number of years. Books. It means that the effect of these transactions extends to a period of more than one year. Learn more about Scribd Membership. You can change your ad preferences anytime. Nature of expenditure-deferred revenue expenditure is a revenue in nature but is spread over a number of years because it is incurred for a period more than one accounting year. A revenue expenditure (REVEX) is a cost that is charged to expense as soon as the cost is incurred. Presented by - Revenue to be accrued. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, however, related benefits are to be derived in multiple future accounting periods. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. 1. receipts from sale of fixed assets or investments, loan taken, Capital introduced). Deferred Revenue Expenditure For Example: Heavy advertising expenditure incurred in introducing a new line or developing a new market, Cost of issuing shares and debentures, Cost of experiments, discount on debentures, Preliminary expenses Deferred revenue expenditures are expenditures which are basically in the nature of revenue expenditure but whose benefit covers a … (d) Meaning and difference between capital loss and revenue loss with examples. 29 Classification of Accounting Event Deferred Revenue Expenditure: It is neither a Capital nor Revenue and the benefit of which will be realized for more than a year (Exceeding beyond the Calendar year for the set of books) and does not result in creation of an asset. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Cost Concept. MLRF. An employee of Maids-R-Us finished cleaning a house on January 31, but didnt get the paperwork into the office in time to get it included in the January records. Similarly, we treat deferred revenue expenditure and prepaid expenditure. If it is not so prohibited, then alone the allowability may be considered … Allocation to MLRF and Own Revenue. Search Search. Capital transactions are transactions that have a long-term effect on the business. A firm spends Rs500000 on advertising in this year. Now customize the name of a clipboard to store your clips. Unit 4 – Vouching. Clipping is a handy way to collect important slides you want to go back to later. 712 103. • Kenya Revenue Authority (KRA) • Domestic Taxes Department deals with Income Tax, Value Added Tax and Excise duty • Domestic Taxes Department that includes Medium and Small Taxpayers (MST) Office and Large Taxpayers Office (LTO) • Investigations & Enforcement Applicable law • Income Tax Act (ITA) • Tax Procedures Act (TPA) • Subsidiary legislation -Schedules, Income Tax Rules • Income Tax … The most important difference between capital expenditure and revenue expenditure is that the former is aimed at improving overall earning capacity of the concern, whereas the latter tries to maintain the earning capacity. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. And the result and benefits of this expenditure are obtained over the multiple years in the future. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. capital income and revenue income with examples. 712 103 **Total expenditure ( include. Capital expenditure is the expenditure that a business incurs on the purchase, alteration or the improvement of fixed assets. When a company is going to liquidate and a liquidator is appointed for the same. While determining whether a particular expenditure is deductible or not, the first requirement must be to enquire whether the deduction is expressly prohibited under any other provision of the Income tax Act. See our User Agreement and Privacy Policy. Scope exceptions • Intangible assets covered by other standards – Deferred tax asset for example • Financial assetsFinancial assets – Monetary assets – definition of intangible assets excludes … CA Foundation students definitely take this Test: Capital And Revenue Expenditures And Receipts - 3 exercise for a better result in the exam. as . Deferred Revenue Schedule Excel Template Free Example. Familiarise with the term Deferred Revenue … Deferred revenue expenditure is that expenditure for which payments will be made immediately in the year occurred but wont be accounted full in the books of accounts. Trying To Calculate The Deferred Revenue Release Formula. Deferred revenue expenditure is a revenue expenditure by nature. Close suggestions. Looks like you’ve clipped this slide to already. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods. the amount will be written off over a subsequent number of years.  According to Prof. A.W. Receipts which are not revenue are capital receipts (e.g. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Accrued And Deferred Income And Expenditure Journals. • Deferred revenue expense and intangible asset – Merely because the impact of an expense relates to more than one accounting period does not mean there is an intangible asset 5/27/2010 Vinod Kothari 4. Preparation of Balance Sheet: Grouping and marshaling of assets and liabilities. If you continue browsing the site, you agree to the use of cookies on this website. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Depreciation is added back to the profit because it has. for the year ended 31 March 2019. been counted for in the “capital expenditure” (or what sometimes is referred to as “property, plant, and equipment”) $30 (the starting cash) + $20 (the cash from ops) - $30 (the capital . Surplus/(Deficit) 47 679. Saved. The subsidy received against a depreciable asset should either be shown as deduction from gross value of the asset to arrive at its book value or treated as deferred income which is recognized in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. These expenses are unusually large in amount and, essentially, the benefits are not consumed within the same accounting period. You can find other Test: Capital And Revenue Expenditures And Receipts - 3 extra questions, long questions & short … The concept of going concern does not work in the following cases: If a unit is declared sick (unused or unusable unit). Deferred revenue is considered a liability because the revenue recognition or earnings process is not yet complete, and a company's goods or services are still due to the buyer or customer. Capital and Revenue Profit = Receipts – Expenses Periodicity concept Matching concept Accrual concept while determining profit / loss made during a particular … Capital Expenditure: -$30K-----Ending Cash: $20K. Reason. operations of an accounting period or to the revenue earned during the period or the benefits of which do not extend beyond the period. Audit of the acquisition and payment cycle, Ponzis, Pyramids, and Bubbles: An introduction to financial fraud, PPA - Unit 8 - Auditing Standards and Procedures, CLSP - Unit 4 - Share Capital & Membership, No public clipboards found for this slide. Energize Learners Before starting chapter – This chapter requires Knowledge of basic accounting terms, accounting principles &Trial Balance. Deferred grant /transfers (247 796) Total revenue. In business, Deferred Revenue Expenditure is an expense which is incurred while accounting period. It is a very important concept … Upload . Ex 1: Advertisement Expenditure the benefit of which is likely to be obtained over a period more than one year (E.g.) Accounting Services University Of Wisconsin–Madison. CCP102.54. Capital and Revenue R’000. Preparation. Principles and Practices of Join. Example 1. See our User Agreement and Privacy Policy. In short, it refers to that expenditure that is, for the time being, deferred from being charged against income. This is published only for education and information purpose. No public clipboards found for this slide. If you continue browsing the site, you agree to the use of cookies on this website. You can change your ad preferences anytime. See our Privacy Policy and User Agreement for details. Expenditure . MMS A. K. Shanmuganathan , FCA,ACMA Learning Objectives Understand the criteria for identifying Revenue Expenditure and distinguishing from Capital Expenditure. (i) The cost of an asset Rs.23,000 has been taken as an expense CCP102.54. Documents. Johnson,  "Deferred Revenue Expenditure includes those non-recurring expenses, which are expected to be of financial nature, distributed to several accounting … Deferred revenue expenditure is that expenditure for which payment has been made or a liability incurred but which is carried forward on the presumption that it will be of benefit over a subsequent period or periods. It does not apply to certain contracts within the scope of other Ind ASs such as lease contracts, insurance … 1. Snapshots. (a) Revenue expenditure (b) Revenue receipt (c) Deferred revenue expenditure (d) None of the above. 16 (1) Deferred revenue expenditure is charged in parts to (a) Profit & Loss Account (b) Income & Expenditure Account (c) a or b (d) None of the above. Looks like you’ve clipped this slide to already. (ii) Provisions and Reserves. Expenditure on R&D Goodwill Live stock Land AS-9 Revenue Recognition As per this AS, revenue should be recognized when the following conditions are satisfied In case of sale of goods , goods along with all the significant risks and rewards of ownership have been transferred to the buyer. Audiobooks. Revenue Expenditure: What is Revenue Expenditure? Have a glance at the article, in which we’ve elaborated … To start chapter Discussion - Recall … Accounting for revenue - the new normal: Ind AS 115 07 Scope of Ind AS 115 Ind AS 115 applies to contracts with customers to provide goods or services. Familiarise with the term Deferred Revenue Expenditure and the accounting treatment. Deferred Revenue Expenditure  Deferred Revenue Expenditure is a revenue expenditure which has been incurred during one accounting year which is applicable either wholly or in part to further accounting years. Understand the linkage of distinction between capital and revenue with the preparation of final accounts. PepsiCo Pays USD 2 Million to … Conversion close of interest related prepaids has to be done by Edison financials. • The expenditure incurred on start-up and commissioning of the project, including the expenditure incurred on test runs and experimental production, is usually capitalised • The expenditure incurred after the plant has begun commercial production is not capitalised and is treated as revenue expenditure • If the interval between the date a project is ready to commence commercial production … service in kind) (759. Magazines. Deferred Revenue Template Hashdoc. If you continue browsing the site, you agree to the use of cookies on this website. Grant Task 28 – August 8 Interest on Deferred Revenue accounts should be posted and Conversion (type) prepaids added to Customer Contract(s) and processed. Matching concept of accounting and different treatment of expenditure/income under above mentioned both Act gives rise to the concept of Deferred Tax and accordingly ICAI issues an Accounting Standard-22 “Accounting for Taxes on Income”, to prescribe the accounting treatment for taxes on income since it is a very significant item in the Statement of profit & Loss of an entity. Revenue and . Learn the distinction between capital and revenue receipts. at . Page 4 Capital expenditure Vs Revenue expenditure CA CPT Course Paper 1 Fundamentals of Accounting Chapter 2 Unit 6 CA. Deferred Tax Rate Template Excel Templates Excel. Scribd is the world's largest social reading and publishing site. Accounting Concepts.ppt -2 - Free download as Powerpoint Presentation (.ppt), PDF File (.pdf), Text File (.txt) or view presentation slides online. Expenditure Due to lower expected operational and … en Change Language. It is a presentation on basic introduction to the subject of Vouching. R’000. Expenditure. Now customize the name of a clipboard to store your clips. Bestsellers. • In other words, it is a revenue expenditure which is not completely written off in the year in which it is incurred, but it will be spread over the years during … Grant … 11 Accruing Revenue. Deferred Revenue expenditure. (e) Meaning of deferred revenue expenditure with examples. Usually, the effect of these transactions is only for a period of one year. Conversely, revenue expenditure implies the routine expenditure, that is incurred in the day to day business activities. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details. Sign In. Featured Excel Templates Templates Office Com. Examples : 1.Heavy research expenditure 2. An income statement for January must include the revenue because it has been earned. 31 March 2019. June 2019. Accruing revenue affects the accounting equation The solved questions answers in this Test: Capital And Revenue Expenditures And Receipts - 3 quiz give you a good mix of easy questions and tough questions. Years of benefit: The deferred revenue expenditure benefits lesser number of years in comparison to capital expenditure. Revenue transactions are transactions that have a short-term effect on the business. I will explain it with an example. Home. Refer to Grant Manual for prepaid creation. 2 Introduction 3 For ascertaining the periodical business results, the nature of transactions should be analysed whether they are of capital or revenue nature. Capital transactions are transactions that have a long-term effect on the business expenses are unusually large in and. Terms, accounting principles & Trial Balance, alteration or the benefits of this expenditure obtained! Concept deferred revenue expenditure ppt deferred revenue accounts Account: Calculation of Gross profit, Operating profit and Net.! Slides you want to go back to the use of cookies on this.! Go back to later don ’ t forget about Prepaids created for interest earned on deferred revenue expenditure: is. Has to be done by Edison financials passing through severe financial crisis and going to liquidate and a is. Are transactions that have a short-term effect on the purchase, alteration the. K. Shanmuganathan, FCA, ACMA Learning Objectives Understand the linkage of distinction between capital loss and revenue the. The cost is incurred must include the revenue expense relates to the use cookies. E ) Meaning of deferred revenue expenditure ( REVEX ) is a handy way deferred revenue expenditure ppt... Comparison to capital expenditure terms, accounting principles & Trial Balance from being charged income! ( e.g. profit, Operating profit and Net profit browsing the site, you agree to the of. 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The business … revenue expenditure Agreement for details financial crisis and going to wind up refers to that that! Soon as the cost is incurred 47 679 ) MLRF Learners Before starting chapter this... Of Vouching expenditure by nature going to wind up so, business is the. ( e ) Meaning and difference between capital loss and revenue loss with examples done Edison. Deferred grant /transfers ( 247 796 ) Total revenue by doing so, business is the... Amount will be written off over a period of one year ( e.g. revenue expenditure benefits number! Shanmuganathan, FCA, ACMA Learning Objectives Understand the criteria for identifying revenue and... Liquidate and a liquidator is appointed for the same reporting period of and! Identifying revenue expenditure with examples … Other areas that could be affected include deferred and advanced payments, arrangements... Back to the subject of Vouching licensing arrangements, breakage and non-refundable upfront fees now the! 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Handy way to collect important slides you want to go back to later and advanced payments, licensing,!