USA Accruing Expense Invoice that is incorrect

[Margo]

If I have 14k water/sewer bill posted in my AP system that I know is incorrect, do I have to accrue it to be in accordance with GAAP?

 

[Margo]

To clarify, I am completing Sept financials & invoice was received & posted in October

 

[kirby]

Is the bill for the month of September Service or for which month or months ?

 

[Margo]

The bill is for Sept service but the bill reflects usage of over 400000 gallons when historically usage was 5. There is either a leak or billing issue. Am I violating gaap if I don’t accrue in sept until I am able to research the issue as long as I add a disclosure statement

 

[kirby]

I would delay issuing Sept financials as long as possible while researching this. If Sept financials cannot be delayed any longer, then accrue the amount you used for August. Be sure to inform your mgmt of this billing situation ASAP

 

[jgilmore]

Don't worry about "violating" GAAP. no one is going to jail b/c you didn't accrue this bill. Here is what i would do. write a memo about what happened, make a good faith estimate of what I think the water company will actually require me to pay and accrue that. attach the memo to the bill and attach both as backup for the accrual. if the water company comes back and requires me to pay the original amount, then i expense it at that time.

Dont leave your management in the dark about this bill. tell them what you are doing.

Caveat: only do this if you are not crossing fiscal years. as long as all this takes place in the same year, you'll be fine.