Entity A expects to make payment of certain expenses on behalf of Entity B.
Entity B will reimburse these costs incurred by Entity A once Entity A provides Entity B with an invoice for reimbursement of these costs together with copies of all relevant invoices from the original expense transactions.
From the perspective of Entity A's accounts, should these transactions be quarantined from Entity A's other operating expenses (eg recorded under Expenses > Other expenses > Reimbursable expenses > Entity B), or allocated under the various operating expense accounts?
From the perspective of Entity B's accounts, should these transactions be allocated to separate operating expense accounts based on the underlying goods/services purchased or should all underlying expenses be aggregated in recognition of the summary reimbursement payment to Entity A (eg Expenses > Other expenses > Reimbursed expenses > Entity A)?
While the answers to some of these questions will no doubt come down to personal preference and reporting requirements, I am interested in any opinions as to how others treat these transactions and why.
Entity B will reimburse these costs incurred by Entity A once Entity A provides Entity B with an invoice for reimbursement of these costs together with copies of all relevant invoices from the original expense transactions.
From the perspective of Entity A's accounts, should these transactions be quarantined from Entity A's other operating expenses (eg recorded under Expenses > Other expenses > Reimbursable expenses > Entity B), or allocated under the various operating expense accounts?
From the perspective of Entity B's accounts, should these transactions be allocated to separate operating expense accounts based on the underlying goods/services purchased or should all underlying expenses be aggregated in recognition of the summary reimbursement payment to Entity A (eg Expenses > Other expenses > Reimbursed expenses > Entity A)?
While the answers to some of these questions will no doubt come down to personal preference and reporting requirements, I am interested in any opinions as to how others treat these transactions and why.