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Can Accounts Payable be negative?

 
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Can Accounts Payable be negative?
kamranACA
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#2
02-11-2009, 10:07 PM
Dear,

You can have four types of balances with such parties i.e. debtors (Debit), advances from customers (Credit), creditors (CreDit), and advances to suppliers (Debit).

So at any point of time the credit balance could be regarded as Creditor or Advances from Customers. Like wise a debit balance could be a Debtor or Advance to Supplier.

The individual balances do not count a lot where you have different sort of transactions at the same time. You can either open it in Debtors or Creditors. However, when there would be net Debit balance at a given balance sheet date it could be grouped in Debtors or Advances to Suppliers and when the net balance would be credit it could be grouped in Creditors or Advances from Customers, depending upon the nature of the balance.

In fact proper grouping is the thing which matters while drafting the financial statement.

You can open two accounts for facilitation purpose. However, you must have to take the net balance to the balance sheet. IAS 39 says that such financial instruments can be reported on net basis if legally enforceable right of set off exists. In your case I guess such right does exist and there is no harm in reporting/grouping the balance on net basis.

If you need further clarification, let me know.


Regards,


KAMRAN.
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Messages In This Thread
Can Accounts Payable be negative? - by abbas_chinikham - 02-11-2009, 09:14 PM
[No subject] - by kamranACA - 02-11-2009, 10:07 PM
[No subject] - by abbas_chinikham - 02-12-2009, 03:15 PM
[No subject] - by Hasaan - 02-13-2009, 10:34 PM
[No subject] - by kamranACA - 02-13-2009, 11:15 PM
[No subject] - by Uzair - 02-19-2009, 05:51 AM
[No subject] - by kamranACA - 02-19-2009, 05:57 PM
[No subject] - by Star - 02-19-2009, 06:35 PM
[No subject] - by Uzair - 02-19-2009, 06:43 PM
[No subject] - by kamranACA - 02-19-2009, 10:05 PM
[No subject] - by kamranACA - 02-19-2009, 10:06 PM
[No subject] - by Uzair - 02-20-2009, 12:28 AM
[No subject] - by Uzair - 02-20-2009, 12:39 AM
[No subject] - by kamranACA - 02-20-2009, 05:01 AM
[No subject] - by Star - 02-20-2009, 03:37 PM
[No subject] - by kamranACA - 02-20-2009, 08:39 PM

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