Accountancy Forum

Hi Team

Is there any time limit within which expenses need to be claimed. I mean do we have any accounting principle stating any time limit.

In a contracting / project based company , we make adequate provisions before closing any contract / project and any future expenses which do show up are adjusted agst the provisions.

As long as the expenses are legit , why will any company refuse to pay?

Inputs would be appreciated...

thanks
Cheers
Kartik

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You are requested to read the Accounting Standard on Revenue Recognition.The Polies,procedure and Accounting methods agreed by the management will be set standard for Claiming Expenses and revenue.
It all about Policy mater and Internal Control System and nothing to do with legality issue.

Hi

according to Limitation Act,1908 if a person does not contact the borrower or other person, liable for making payment to him, within the period of Three (3)years then the right of the first person or party will be ceased.

So remain intouch with your borrowers and continue correspondence with them regarding the unclaimed expenses.

according to Income Tax Ordinance,2001 the expenses of long contract shall be apportioned on the length of the contract on the basis of estimated cost of project.