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Please support resolving this case.
3 years ago, an invoice was wrongly accounted for. Instead of recognising my revenue for $100, I have recognized for $1,000. Of course, this amount is not due by the customer...
However, there is a provision for baddebt of $900 (since this amount is still appearing as a receivable).
I would like to charge this "receivable" of $900 instead of reversing the revenue for the same.
Will this be ok - as per IFRS?

Thanks a lot.

in IAS 18 - Revenue by

1 Answer

0 votes
This appears to be an error and you need to apply IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, in correcting this error.  See that IAS 8.42 says:
"....an entity shall correct material prior period errors retrospectively in the first set of financial statements authorised for issue after their discovery by:
(a) restating the comparative amounts for the prior period(s) presented in which the error occurred; or
(b) if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented."

Since the error took place 03 years ago you could adjust the retained earnings.
Dr - Retained earnings & Cr - debtors.
by Level 1 Member (1.3k points)