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If making the transition from reporting your GST figures on an accruals basis to a cash basis, care , 9299, 31857Your accounting basisrefers to your method of accounting that affects how you report GST. In Australia, the two methods are known as Cash and Accrual, while in New Zealand they are known respectively as Payment and Invoice, as well as a third Hybrid option. Visit either the ATO website or IRD website for specifics on your eligibility and reporting implications. When changing your accounting basis, there are some things to consider. | If changing from | Consider this |
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| cash to accrual | Care needs to be taken that some figures are not left out of BAS/GST reporting after the transition date. This is because when reporting in the BAS/GST periods prior to the transition, supplies, acquisitions, GST collected and GST paid was only reported when payments were received and made in cash during those periods. The danger is that invoices that were not paid during the cash reporting period may not be included on future accrual based BAS/GST Returns when they are paid after the transition date. | | accrual to cash | Care needs to be taken that some figures are not reported twice in the |
| transition BAS/GST period. |
| This is because when reporting in the |
| previous BAS/GST period to when the change is made, all recorded sales and purchase invoices would have been reported on |
| the BAS/GST return regardless of whether or not they had been paid. |
| The danger is that the invoices that were not paid in the |
| future BAS/GST return when they are paid after the transition date. |
If you're changing your GST reporting from cash to accrual basis, see this . Note: AccountRight and AccountEdge are designed as accrual based software and this cannot be changed. However, the instructions below allow you to report your GST obligations on a cash basis. How do I complete my BAS correctly after converting to a cash basis?In order to avoid this double counting, the BAS will need to be filled out and checked manually for a period of time. BASlink will not be able to be used during this period. To assist in this process, complete the following: - Print a GST [Detail - Cash] report for the first BAS period after converting to the cash method.
- Go to the Reports menu and choose Index to Reports.
- Click the GST/Sales Tax tab.
- Click the GST [Detail - Cash] report (under the GST Reports sub-heading).
- (AccountRight v19.6 and earlier) Click Customise.
- Make sure that the correct date range is chosen in the report filters. For example, if you are converting from accrual to cash reporting on 1st July 2011, and you report GST quarterly, you would filter the report for the September 2011 quarter. This report will show all of the amounts paid against sales and purchases invoices as well as the GST collected and paid during the BAS period.
- Click Display.
- Print the Receivables Reconciliation [Detail] and Payables Reconciliation [Detail] reports filtered for the last day of the month that was the last month that you reported your BAS on an accruals basis. In the example above, you would filter the reports for 30th June 2011. These reports will show all outstanding sales and purchases as at that date, in other words sales and purchases that had not been paid at that point in time.
- Compare the GST [Detail-Cash] report with the Receivables Reconciliation [Detail] and Payables Reconciliation [Detail] reports. Identify any sales or purchases that were outstanding as at the transition date against which payments have been made in the first BAS period after the transition to cash reporting. These payments will show in the GST [Detail-Cash] report. Cross off these payments and the associated GST collected and Paid on the GST [Detail-Cash] report, because they have already been reported in a previous period. Any amounts that are left on this report will then need to be transferred to the BAS being reported on a cash basis.
This process will need to be repeated in future periods until all outstanding invoices as at the transition date have been paid or otherwise written off. BASlink can then be used as per normal to prepare the BAS from that point on.In AccountRight, you'll specify your new accounting basis in the BAS info settings (Australia) or when preparing your GST return (New Zealand). That's the easy part. What's tricky is ensuring you report the correct amount of GST (see the table above). This is where you might need help from an accounting advisor. Want to learn more?We might not be experts in changing your accounting basis, but our community forum is a great place to connect with business professionals who are happy to share their insights. | 
