Enter a prior year adjustment
You can enter prior period adjustments.
To create the Prior period adjustment
- Trial Balance > Journals > Create Journal.
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From the Period ending drop-down list, choose the comparative period.
Even though you’re selecting the comparative period, the journal will not affect the set of accounts for the comparative period; only the current set of accounts comparative figures are affected.
- Make sure the Prior period adjustment check box is selected.
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Enter the following information:
Date Defaults to the current period. Reference Enter a reference for the journal, for example, ‘Prior period adjustment’. Description Enter a description to remind you of the purpose of the prior period adjustment -
Enter your balances.
- Balances round to the nearest whole number, so 100.58 will round to 101. However, bankers rounding is applied so numbers ending in 0.5 will round to the nearest even whole number. For example, whilst 100.58 will round to 101, 100.50 will round to 100 (i.e. the nearest even whole number to 100.50). Balances are supported up to £999,999,999.00.
- You can use your keyboard’s arrow keys, the return key, or the Tab key to move around.
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Click Save.
When saving, the total of all debits must equal the total of all credits.
The profit and loss account and balance sheet for the comparative period now have (as restated) in their column headings.
The actual set of accounts for the comparative period has not been affected by the prior period adjustment, only the comparative figures in this set of accounts.
To create a journal to correct reserves
If your prior period adjustment won’t affect the reserves of the current period, you won’t need to complete this step. For example, if your prior period adjustment is to replace a debtors entry with a creditors entry, that wouldn’t affect the reserves so you wouldn’t need to complete this step.
- Trial Balance > Journals > Create Journal.
- From the Period ending drop-down list, choose the current period.
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Enter the following information:
Date Defaults to the current period. Reference Enter a reference for the journal, for example, ‘Prior period adjustment – correction for reserves’. Description Enter a description to remind you of the purpose of the journal. -
The following account codes become available once you’ve entered a prior period adjustment journal.
3050 Profit and loss account – Prior period adjustment 3051 Share premium account – Prior period adjustment 3052 Revaluation reserve – Prior period adjustment 3053 Other reserves – Prior period adjustment -
Enter your transactions.
Balances round to the nearest whole number, so 100.58 will round to 101. However, bankers rounding is applied so numbers ending in 0.5 will round to the nearest even whole number. For example, whilst 100.58 will round to 101, 100.50 will round to 100 (i.e. the nearest even whole number to 100.50). Balances are supported up to £999,999,999.00.
You can use your keyboard’s arrow keys, the return key, or the Tab key to move around.
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Click Save.
When saving, the total of all debits must equal the total of all credits.
To enter your disclosure text
An empty paragraph has been entered in the notes to the accounts for disclosure text relating to the prior period adjustment. You can use this paragraph to describe the nature of the prior period adjustment you’ve entered.
- Click Accounts Preview.
- From the navigation menu, choose Notes to the Accounts.
- Find the Prior period adjustments paragraph.
- Click Edit > enter your disclosure relating to the prior period adjustment > Save.
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