USA Prior Period Fees Treatment

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DonNYC

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We just received a bill for fees that date back to 3 years. We weren't aware of these fees and only this fiscal year an agreement was executed, including ongoing fees for this year and the future, as well as catch-up fees that go back 3 years. I am inclined to not hit the P&L for the catch-up fees and only adjust retained earnings, but not sure if that would be the right approach since we executed the agreement this fiscal year these expenses were omitted because of error or oversight on our part. Any suggestion on how to book the fees would be helpful
 
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kirby

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If those fees were material to the financials in the respective years, you may need to post a prior period adjustment. Check with the CPAs who audit your books as to what amt is considered material. If no PPA needed, then post entire amount into the current period.
 
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