Question for accountants (sorry)

[Seagull over NZ]

If the company I work for gives a voucher for all its current customers which allows them to get £50 off a product if they buy it in the next 6 months, have I got a liability that I need to provide for now?

If so, under which accounting standard or principle does this apply?

Sorry for the OT nature, and not an interesting one at that but I need to know, just as much as I need to know who our next manager will be. This question may be easier to answer though...

 

[Citrus]

 

[CAFC Matt]

 

[marvin]

Im not an accountant (Chairman of a Company though) but under normal accrual accounting procedures I doubt it as its not a liability till someone uses it. Then it should be charged against a sales ledger. (IE the price gained for a stock item was less by the amount of the voucher).

You will probably be wise making an allowence for the potential liability in any budgeting process but I assume the voucher does not reduce the purchase price of the item below cost price. You would therefore make a profit on the item once its sold, just less of a profit as if you had reduced the price of the item.

 

[Gary Nelson]

If the company I work for gives a voucher for all its current customers which allows them to get £50 off a product if they buy it in the next 6 months, have I got a liability that I need to provide for now?

If so, under which accounting standard or principle does this apply?

Sorry for the OT nature, and not an interesting one at that but I need to know, just as much as I need to know who our next manager will be. This question may be easier to answer though...

Are you saying you are the company or recieving it as an employee? As an employee, the gift voucher is exactly that, a gidt you cannot be taxed onit. If its £50 cash, then you are liable under income tax. PM Gareth Gloverif still not clear as he's an f.a so should be able to cover this.