My client is on accruals. Do I account for the Cash Flow Boost via Journal Entry at 30 June or do I only account for the Cash Flow Boost NANE when received which is in the next Financial Year?
The way I see it the CFB is an addition to the BAS & does not form part of the BAS so it should not be accrued. Is my logic correct?
We certainly agree with your logic – it is not an accrual arising from the business activities of the entity.
In the event these are “Special Purpose” financial reports (with little anticipated review by third parties), I would not accrue.
The entitlement to the second cash flow boost payment was crystallised after lodgement of the June 2020 BAS which of course occurred after year end.
While it is not mandatory to accrue, some Practitioners may validly choose to do so on the basis the lodgement of the BAS was a mere formality.
Of course, the second cash flow payment involves a portion of the payment being attributed to tax period ended 30.6.2020.
This will be either 50% of half the amount of the second cash flow boost payment where the entity lodges its BAS on a quarterly basis, or 25% where the entity lodges its BAS on a monthly basis.
Effectively you have a choice.