BASQUE COUNTRY AND NAVARRE: Periodize your expenses before the end of the year

According to accounting standards, expenses must be recorded in the fiscal year in which they are incurred, regardless of the payment date. Therefore, when closing your company's accounts, do not forget to make the necessary accounting adjustments to comply with this principle.

What about prepaid expenses?

✓ It is possible that in the closing fiscal year, your company has paid in advance, and accounted for, expenses for which the consideration will be received in whole or in part in the following fiscal year. For example, insurance premiums that cover part of the next year, fees paid in advance for services that you will enjoy during part of the upcoming year...

✓ Well, when closing the accounts, these prepaid expenses must be allocated to the following fiscal year as appropriate.

And what about deferred expenses? ✓ The opposite may also occur; there may be expenses that have already been incurred (and, therefore, can be accounted for), but are not recorded in the accounts because their payment is not due until the next year. For example, accrued but unpaid bonuses, loan interests or deferrals, the audit expenses themselves...

✓ In this case, these deferred expenses must be allocated to the closing fiscal year.

There is a specific accounting treatment to reflect this type of expenses. Our professionals can help you close the accounts for the fiscal year so that they reflect a true and fair view of your company.

There is a specific accounting treatment to reflect this type of expenses. Our professionals can help you close the accounts for the fiscal year so that they reflect a true and fair view of your company.