Mar 18, 2015 04:40
9 yrs ago
Japanese term
遅延／早期計上
Japanese to English
Bus/Financial
Accounting
仕入（加工）・売上処理の 遅延／早期計上
This is a heading in a table of categories of accounting risks. Is "delaying/accelerating bookkeeping entries" an accurate translation?
This is a heading in a table of categories of accounting risks. Is "delaying/accelerating bookkeeping entries" an accurate translation?
Proposed translations
(English)
| 3 | postponed/accelerated posting |
Port City
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| 3 +1 | Deferred / accrued entries |
T.B.
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| 3 | Delayed/Early calculation |
torarin
|
| 3 | deferral /cash basis accounting treatment of [ ] |
Marc Brunet
|
Proposed translations
2 hrs
Selected
postponed/accelerated posting
The source refers to "window-dressing" accounting - purchase is posted (recorded) in a future accounting period while sales from a future accounting period is posted in the current accounting period so that the profit (which is sales minus cost) appears larger than the actual.
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Note added at 2 hrs (2015-03-18 07:25:45 GMT)
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I mean "purchase from the current accounting period is posted (recorded) in a future accounting period". Hence, the postponement.
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Note added at 2 hrs (2015-03-18 07:25:45 GMT)
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I mean "purchase from the current accounting period is posted (recorded) in a future accounting period". Hence, the postponement.
Note from asker:
| Thank you for your answer and I also like the term you used "window dressing." I was using "cooking the books" but thought it felt too informal for this document. |
4 KudoZ points awarded for this answer.
1 hr
3 hrs
Marc Brunet
Australia
Australia
Australia
To seize the 'point' beyond the words
Native in: French
Works in: Japanese to English, Japanese to French, French to English
deferral /cash basis accounting treatment of [ ]
'accrual basis accounting' is actually the main alternative to the 'cash basis accounting' method. 'Deferral accounting' is one special case of that accrual system when it spreads across 2 or more of the account reporting period used. The reason: the matching principle states that expenses must be recorded during the period in which they are incurred, regardless of when the transfer of cash occurs.
ex:
For example, a company receives an annual software license fee paid out by a customer upfront on the January 1. However the company's fiscal year ends on May 31. So, the company using accrual accounting adds only five months worth (5/12) of the fee to its revenues in profit and loss for the fiscal year the fee was received. The rest is added to deferred income (liability) on the balance sheet for that year.
On the other hand,'cash basis accounting' calls for the recognition of an expense when the cash is paid, regardless of when the expense was actually incurred. A priori this might suggest that the purchase amount is recorded as 'earned' as soon as the transaction has closed, but it does not always works out that way.
The key difference with the accrual method is that the vendor records the whole amount received for the sale, but not before the full amount for it has been transferred/ (or pledged? I am not sure), so there is the hitch: if the buyer delays payment for some pretext or other, the revenue from that transaction cannot be immediately recorded.
Large enterprises engaging in longer term service contracts need the accrual method, so as to sharply pin down their I/O profitability at any point of a long period spanning months if not years.
Small businesses do not need such an involved system and often settle for the cash basis accounting method.
The link selection I found useful, looking into this includes:
http://uk.ask.com/wiki/Revenue_recognition?qsrc=3044&lang=en
http://www.accaglobal.com/uk/en/technical-activities/technic...
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Note added at 4 hrs (2015-03-18 08:53:00 GMT)
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PS: if some lighter expression is required to suit the style of your document, would then go for : deferred / brought forward
ex:
For example, a company receives an annual software license fee paid out by a customer upfront on the January 1. However the company's fiscal year ends on May 31. So, the company using accrual accounting adds only five months worth (5/12) of the fee to its revenues in profit and loss for the fiscal year the fee was received. The rest is added to deferred income (liability) on the balance sheet for that year.
On the other hand,'cash basis accounting' calls for the recognition of an expense when the cash is paid, regardless of when the expense was actually incurred. A priori this might suggest that the purchase amount is recorded as 'earned' as soon as the transaction has closed, but it does not always works out that way.
The key difference with the accrual method is that the vendor records the whole amount received for the sale, but not before the full amount for it has been transferred/ (or pledged? I am not sure), so there is the hitch: if the buyer delays payment for some pretext or other, the revenue from that transaction cannot be immediately recorded.
Large enterprises engaging in longer term service contracts need the accrual method, so as to sharply pin down their I/O profitability at any point of a long period spanning months if not years.
Small businesses do not need such an involved system and often settle for the cash basis accounting method.
The link selection I found useful, looking into this includes:
http://uk.ask.com/wiki/Revenue_recognition?qsrc=3044&lang=en
http://www.accaglobal.com/uk/en/technical-activities/technic...
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Note added at 4 hrs (2015-03-18 08:53:00 GMT)
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PS: if some lighter expression is required to suit the style of your document, would then go for : deferred / brought forward
Reference:
http://uk.ask.com/wiki/Deferral?lang=en
http://uk.ask.com/web?q=accrual+accounting+rules&qsrc=2352&qo=searchSuggestions&o=7323&l=sem
Peer comment(s):
| neutral |
T.B.
: I agree with you on "deferral part." But I don't think your explanation of the matching principle is accurate. Also, cash basis accounting will not be an issue here. I have posted my take on this question, where you will find how I see it.
8 hrs
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You did a very good job of explaining this. My own attempt definitely needed a 2nd draft. You gave us a clear 'final'.Thank you.
|
+1
11 hrs
Deferred / accrued entries
The term might have something to do with three accounting principles/concepts. These include accrual basis of accounting, revenue recognition principle, and matching principle. Japanese accounting practices are in line with them.
Under "accrual basis of accounting," business transactions are recorded when they occur, not when the related payments are received or made.
When applying the accrual concept to revenue recognition, an entity needs to record revenue only when a revenue generation process has been substantially completed. This is called "revenue recognition principle."
"Matching principle" requires that revenues and any related expenses be recognized together in the same period in order to reach accurate net income figure.
For example, generating revenue by selling goods is a type of business transaction. So it will be recorded when sales are made but remained unfilled (= accrued entries = 早期計上). When a customer pays monthly subscription fees for membership in advance, revenue is generally deemed to occur (= recognized) when the customer enjoy membership benefits every month. The service provider will report the payment as part of its revenues in January through December (= deferred revenues = 売上処理の遅延). A company will report a payment for purchasing raw materials (仕入れ) made in one period as an expense in a later period to recognize together with related revenue.
http://www.accountingtools.com/accrual-principle
http://www.accountingtools.com/revenue-recognition-principle
http://www.accountingtools.com/matching-principle
http://financereading.com/types_of_accounting_adjustments.ht...
Under "accrual basis of accounting," business transactions are recorded when they occur, not when the related payments are received or made.
When applying the accrual concept to revenue recognition, an entity needs to record revenue only when a revenue generation process has been substantially completed. This is called "revenue recognition principle."
"Matching principle" requires that revenues and any related expenses be recognized together in the same period in order to reach accurate net income figure.
For example, generating revenue by selling goods is a type of business transaction. So it will be recorded when sales are made but remained unfilled (= accrued entries = 早期計上). When a customer pays monthly subscription fees for membership in advance, revenue is generally deemed to occur (= recognized) when the customer enjoy membership benefits every month. The service provider will report the payment as part of its revenues in January through December (= deferred revenues = 売上処理の遅延). A company will report a payment for purchasing raw materials (仕入れ) made in one period as an expense in a later period to recognize together with related revenue.
http://www.accountingtools.com/accrual-principle
http://www.accountingtools.com/revenue-recognition-principle
http://www.accountingtools.com/matching-principle
http://financereading.com/types_of_accounting_adjustments.ht...
Discussion
-mispresentation of company's accounts and performance;
The first body to pounce on this fraud very hard is usually the SX listing that stock: their capacity to make a market depends on ensuring top credibility for that market. If they lose it, they lose business.
1/ risks for whom? the company / taxation department/ investors?
2/ risks materializing in what way?
- poorer profitability image if strictly respects the accounting rules it officially reports by (accrual accounting method)?
- taxation fine if it does not and is found out?
- mixed result if it fudges the dates of entry for resource expenses and sales revenues, deferring entry of the former and bringing forward entry of the latter to show a better performance for the current accounting period? Mixed result because company will have a harder time to look just as good in next term if it already uses up the shoring up function of some sales revenues that belong with next term.
On the other hand, if that 'manipulation' technique is being used to equalise / smooth out the results of its performance undertaken under vastly different economic conditions, and if this is tolerated, what are those 'accounting risks' in that latter case?
So thank you HB-san for your take on subtext of this heading.
As for 計上, "posting" is one translation among others. http://www.businessdictionary.com/definition/post.html
http://www.weblio.jp/content/計上?dictCode=KAIKE