I am in finance for 18 years, of them 7 as CFO, I passed my CPA exams 11 years ago. I really don't get this finance part and it makes by head spin :-O
>> because we had collected a lot of revenue that we couldn’t recognize because it was for a future event. That means it was a liability, not an asset. Ouch.
No. This is called Deferred Revenue or Prepayment. You can not recognize it in P&L, but you are required to recognize it in Balance Sheet as an asset (I think this would be Debit Cash / Credit Prepayment | Deferred Revenue).
>> It was down to the fact that I couldn't accrue future staff costs towards the event.
You can not accrue future staff costs - that is not appropriate. See Cash Based Accounting vs Accuals Based Accounting.
However, if you failed to accrue the legitimate expenses - that would results in overpaying profit tax and restatement of financial statements. Not sure about consequences for the CPA, who signed off your books.
Chaps, finance is not that difficult! Configuring network, hardening web servers, compiling nginx with proper modules/flags is way more difficult.
May be I shall trade finance lessons for devops lessons? :-)
>> because we had collected a lot of revenue that we couldn’t recognize because it was for a future event. That means it was a liability, not an asset. Ouch.
No. This is called Deferred Revenue or Prepayment. You can not recognize it in P&L, but you are required to recognize it in Balance Sheet as an asset (I think this would be Debit Cash / Credit Prepayment | Deferred Revenue).
>> It was down to the fact that I couldn't accrue future staff costs towards the event.
You can not accrue future staff costs - that is not appropriate. See Cash Based Accounting vs Accuals Based Accounting.
However, if you failed to accrue the legitimate expenses - that would results in overpaying profit tax and restatement of financial statements. Not sure about consequences for the CPA, who signed off your books.
Chaps, finance is not that difficult! Configuring network, hardening web servers, compiling nginx with proper modules/flags is way more difficult.
May be I shall trade finance lessons for devops lessons? :-)