obiero wrote:delllatitude wrote:obiero wrote:delllatitude wrote:The article states.....“At the time of publishing this (annual) report, the ongoing audit classified the subject line under the directors’ receivables. These amounts will be reclassified back to the profit and loss (account) in the next statements once the audit is complete,”
This is just wrong accounting and it makes me doubt the KQ numbers. How do you reclassify debtors back to profit and loss??
Bad debts recovered
But they say the amount is under receivables. A balance sheet account.So there is no recovery of bad debt. It's simply getting money from the directors, debiting bank and crediting the receivables. The profit or loss is not touched.
The unnamed director is Sebastian Mikosz. These were incurred expenses under director remuneration thus must hit the P&L
If they were incurred expenses then the entry is
Dr. P&L
Cr. Bank/Payables
But note 36 (d) page 119 mentions that in other receivables there is Kshs 54 million due from the directors. This statement means that what happened is
Dr. Receivables from directors
Cr. Bank/Payables
Simply put. KQ either paid for goods or services on behalf of the directors. Or they gave the director an advance.
When the money is recovered, it will be a reversal of transaction 2 above. So it is wrong to state that it will affect Profit or Loss