2. Recording Financial Information
Liz MacFadyen February 2017

3. Basis of Updates to RFI
HMRC amendments to legislation for treatment VAT where cash/prompt payment discounts are offered
Effective from 2015

4. Overview of changes to VAT
All invoices are now issued and recorded with VAT at standard rate
Where PPD offered, PPD terms and amounts should be stated also
If the discounted price is paid in accordance with the terms, the accounting records are adjusted at this time

5. Updates to RFI Revised Unit Specification Outcome 1
- calculation of PPD for payments to suppliers and receipts from customers
- wording modified slightly to require calculation of VAT
Outcome 2 and 3
- Minor wording changes

6. Updates to RFI (cont)
Exemplars/ASPs 1 and 2 updated to reflect changes to VAT for PPD, as per Unit Specification
For implementation in Session 2017/18

7. Outcome 1 Day Books and Cash Book
Very minor modifications to questions to meet the revised Unit Specification
Day books – all invoices/credit notes entered at standard rate VAT
Cash Book
Discount columns removed
Supplier payments and customer receipts recorded net of PPD, where appropriate

8. Outcome 1 (Continued) Two additional day books:
Discount Allowed Day Book
Discount Received Day Book
These are the books of original entry for recording PPD
Unit Specification allows other appropriate books to be used

9. Outcome 2 Postings to Ledgers
Generally remains unchanged except for postings to ledgers from the 2 new day books
Discount Allowed Day Book
- Dr Discount allowed (net amount)
- Dr VAT (VAT adjustment)
- Cr Customer account (gross amount)
Discount Received Day Book
- Dr Supplier account (gross amount)
- Cr VAT (VAT adjustment)
- Cr Discount Received (net amount)

10. Outcome 3 VAT Return
Include relevant figures from Discount Allowed and Discount Received Day Books in VAT Return workings

11. Discussion and Questions?