How do I record Expired Gift Certificates?

[CaudilloD]

How do I Remove Expired Gift Certificates from the Liability Account?

I am trying to figure out how to record the gift certificate liability once it expires?

I work for a retailer. From time to time we give out gift certificates either as donations or promotions, and unlike our regular gift cards (purchased by customers), these gift certificates do in fact have an expiration date...

-When the gift certificate is issued I Debit the expense (Donation or Promotion, etc.) and Credit the Gift Certificate Liability.

-When the gift certificate is redeemed I Debit the Gift Certificate Liability and Credit Sales.

-But when the gift certificate expires unused, I need to Debit the Gift Certificate Liability, but what do I credit???

I thought about crediting the expense, but that doesn't make much sense as it would obviously be recorded in a different period...

In the mean time I have set up a sort of contra-liability account to place these credits until I can figure out what to do with them... What am I doing wrong here?

Thanks in advance for any help!

 

[Counterofbeans]

thought about crediting the expense, but that doesn't make much sense as it would obviously be recorded in a different period...

Why doesn't this make sense to you?

The fact that it would be recorded in a different period doesn't have anything to do with the correct accounting

At one point, you had a liability, then, later on after certain events have happened/not happened, you no longer have the liability.

I'd say the correct accounting is to credit the original account(s) that you debited when you first set up the liability