These are those that reflect facts or circumstances from which possible obligations under a contract or obligation can be inferred. In these credit accounts, at some point, there may be contingent liabilities that may affect the structure of the business and include those used for internal debt and equity control purposes. Once the customer`s order is fulfilled, the following points are noted: Off-balance sheet accounts are a tool for recording transactions or facts that, although they do not change the company`s balance sheet, it is important to take them into account. This is because they represent contingent rights or obligations. That is, they may or may not happen, and there is still uncertainty about them. The secondary feature of financial information; SUFFICIENT DISCLOSURE (combined with the qualitative criterion of reliability as sufficient information, TIN A-4, formerly B-1), justifies their use insofar as the information provided by these accounts provides the user with more important elements to analyze and interpret the balance sheet and thus make better decisions. If the comparison is identical to the previous one, these accounts are assimilated to the accounts and liabilities of a balance sheet, since they constitute an obligation of the economic entity. The company AZY asks the bank for a letter of guarantee of 10,000 euros to ensure compliance with a customer`s order. Then, the following entry would be recorded for the delivery of that document: these are those which reflect facts or circumstances from which economic entity rights can be derived, which may arise from a contract or obligation. Any person who is abused by a family member or a member of the household in which they live can receive a protection order. This order is designed to protect you and anyone else living in the household, including minor children. Similarly, any person with a disability who is abused or ignored by a family or household member may receive a protection order.
These accounts also make it possible to track administrative aspects, such as ongoing legal proceedings or goods received. The existence of this type of account is in accordance with the accounting principle of sufficient information. This means that the company`s financial statements must contain the information necessary to enable third parties to make decisions about the company (for example, to buy or value its shares). Therefore, off-balance-sheet accounts are used to monitor transactions and economic events that do not change the financial structure or operating results of the company, as well as to memorize these transactions or events, such as: • Bonds or contracts from which the rights (debtors) can be drawn must be recorded in the deposits. off-balance-sheet accounts, also known as correlated, recoverable or memoranda balances; These are those that are used to carry out the calculation or recording of transactions that do not affect the financial situation or profit or loss of the company, but have a subsequent effect of the same if they can change or modify this situation. • Off-balance-sheet accounts must be justified, quantifiable and verifiable so that they can be recognized for the amount of the right or obligation, if any. Its registration is in the form of a credit or credit on the order account of the supplier concerned according to its group, and its counterpart, on the other hand, is recorded by the creditor account. Its registration is carried out as follows: a debit or debit of the respective order account and a credit or credit on the account called debtor on the contrary, according to its group, ie either conditional or control. The name of the off-balance-sheet accounts is determined by assigning the name to an off-balance-sheet debit (COD) according to the concept to be recognized, and the creditor clearing account (COA) is reversed in the order of the denomination of the cash on delivery. Other options are to have or count the word at cash on delivery and have the word at the COA or against the add or add account.
Depending on the economic transactions or events that can be controlled using the clearing or memorandum accounts, they are classified as follows: In Colombia, countless individual charts of accounts have been drawn up, depending on the sector specialized in accounting information management, namely the financial sector, insurance, trade, stock exchange, health, solidarity and publicity, among others. For this reason, below we give a brief summary of the classes or their respective codes for handling events to be accounted for in these accounts in the registry. There are two ways to capture off-balance sheet accounts: In this case, we see how balance sheet accounts such as common shares were used. The classification and quantification of contingent liabilities shall be adjusted at least at the end of each period, where appropriate on the basis of the expert approach. Are you worried about doing it alone? You may be able to get free legal help. You will have some practical cases in using suspense accounts for tax concepts such as depreciation and tax losses. It should be noted that, in our opinion, not only can permissible deductions be recorded in off-balance-sheet accounts or memorandum accounts, as they are also called, but also certain accumulated income and other tax concepts such as CUFIN or CUCA can be recorded for the purposes of their administrative or tax control. • When events occur, they must be recorded; Similarly, if an event ceases to exist or is deleted, the order account must be reversed immediately. These are accounting accounts used to quantify and disclose the facts or circumstances from which rights (debtors) or obligations (creditors) may be generated that would affect the financial structure of a company at a given time and serve as an internal control for the proper management of management information or future financial positions. In this sense, transactions that do not change the financial structure of the economic entity Page 82ca, in order to meet the disclosure assumption, must be audited by off-balance-sheet accounts; Since this will make it possible to disclose in the financial statements information arising from the financial and tax rights and obligations of various items which, although not directly affecting the financial structure of the company, may affect it in the near future (contingent liabilities arising from judgments, assets and securities of others managed by the company, Commission-based sales, etc.).
It is very important that if a transaction affecting the order accounts is recorded, this event or circumstance is only one of them, i.e. the order account is unique, debtor or creditor, and since it operates according to the double booking system, we will always use the debtor or creditor account as counterparty on the contrary. Only registered users can post comments. Log in or register if you want to leave a comment. Was this information helpful? Let us know! We can`t give legal advice in the comments, so if you have any questions or need legal help, go to Legal Assistance or read our FAQ. (b) Cross. Only off-balance-sheet accounts and balance sheet or profit and loss accounts are concerned. Tax audit mandate accounts are the most important for the purposes of our investigation, as different tax concepts are considered in this group, namely: An important point that we cannot overlook is that off-balance-sheet account balances are shown below the balance sheet as if they were separate accounts. (b) Profit and loss account: debtor and creditor • The different concepts should be grouped into specific accounts depending on the nature of the transaction or event and the respective debtor or creditor account should be used as consideration. A protection order may be issued against any of the following: As mentioned in Chapter II of this book, Articles 31(IV) and 172(V) of the Income Tax Act and Articles 36 and 232 of its Regulations stipulate that one of the conditions to be taken into account for the permissible deductions of natural and legal persons: These deductions are properly accounted for and are deemed to have satisfied this requirement, even if they are held in deposit accounts.