Is VAT included in turnover??

xp90

Hi all
Is Vat included in Turnover in a companies financial statements?
Thanks

djdeclan

No, turnover (as with all items in the financial statements) is shown ex. VAT
The amount due to/from the collector general is shown in the balance sheet as a debtor or creditor.

slave1

Is VAT not included in say, trade receivables balances in the B Sheet?

hivizman

slave1 wrote: »

Is VAT not included in say, trade receivables balances in the B Sheet?

When a sale is made on credit, the customer's account is debited with the amount of the invoice including VAT, and sales is credited with the amount of the invoice excluding VAT. The VAT on the invoice is credited to the VAT account. At the end of the period, trade receivables consist of amounts due from customers (which thus include relevant VAT). Any VAT on sales not covered by VAT on purchases and not yet paid over to the tax authorities represents a liability.

IAS 18 Revenue makes it clear that amounts collected by an entity on behalf of others are not included as revenues of the entity. This includes sales taxes such as VAT that are charged on sales and ultimately paid over to the government.

Some public companies disclose both the VAT inclusive and the net revenues, but turnover strictly should just include the revenues net of VAT.

meangene

very interesting

myshirt

meangene wrote: »

very interesting

Very straight forward more than very interesting.