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Prepayments & Accruals

Jo G
  • Fellow PM.Dip
  • Practice Licence
  • 186 posts
  • # 81685

Hi guys,

Do you implement prepayments/accruals for every applicable item irrespective of the amount or do you have a cut-off amount?  For example - a domain name of circa £7 for two years - for such a minimal amount, would you still record this over multiple accounting periods?

Many thanks in advance,

Jo       
kjmcculloch
  • 1159 posts
  • # 81694

Personally, I treat it similar to fixed assets.  We all know that staplers are likely fixed assets (except in my office where they grow legs) but would never dream of dealing with them as such due to the value.  I feel much the same about prepayments and accruals.  For the value you are talking about I would expense it in the period incurred.

Kris 
Jo G
  • Fellow PM.Dip
  • Practice Licence
  • 186 posts
  • # 81696

Thanks Kris, that was my initial thoughts for such small amounts too :-)

Jo
  • 60 posts
  • # 81713

I personally use a cut off figure of £100 for fixed assets and £50 for prepayments and accruals.
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