Final Word from Wednesday, April 6, 2011

Tweeten

It's a basic principle of single-entry accounting that incomingand outgoing payments are recorded on the date they aremade. In contrast, double-entry accounting requires that aninvoice be recorded for the period during which the serviceis performed, not when payment is made. As of April 1, theCR now has something that might be facetiously called tripleentryaccounting. An invoice with an April 30 or May 1 issuedate for services performed in April won't be recorded for VATpurposes until the invoice is actually received, which will usuallybe in May at the earliest. This means the recipient companywon't be able to claim a VAT rebate on the invoice until itfiles its May return, and not on its April return as was heretoforethe case. Companies wanting to maintain sanity in theirbooks will have to add another entry, which might very wellbecome known as the "Kalousek column." All it really does is"simplify" the tax system by giving the finance ministry a onetimeloan and thousands of companies one big headache.