How to deal with the property management fee paid in advance for 3 months in the initial stage, and do it in "long-term prepaid expenses" or "prepaid expenses"

Start-up expenses should be included in other receivables during the start-up period of the enterprise-start-up expenses. At the beginning of business, it is included in the management fee-organization fee at one time.

The prepaid account has long been cancelled. According to the provisions of the new accounting standards (2007 edition), the prepaid expenses and accrued expenses that have been cancelled, among which the prepaid expenses are changed to directly enter the relevant expense accounts when they occur.

If amortization is needed, other accounts receivable can be used for accounting.

Reasons for canceling prepaid expense account

Follow the concepts of assets and liabilities.

The new standards strengthen the concepts of assets and liabilities, while downplaying the concepts of income and expenses. The concepts of assets and liabilities are more in line with the usefulness of information, and projects that can no longer bring future economic benefits to enterprises, that is, projects that do not meet the definition of assets, are excluded from the balance sheet. For example, "prepaid expenses" are essentially expenses and belong to worthless assets. It is the "sunk cost" that the enterprise has consumed once it happens. It has no use value and no liquidity. If the enterprise goes bankrupt, it is impossible to use it to repay debts. If it is classified as an asset, it will inflate the total assets of the enterprise, exaggerate the asset-liability ratio of the enterprise, seriously affect the fairness of the financial indicators of the enterprise, and is not conducive to the production and operation of the enterprise by investors.

Some enterprises still keep the accounts of "prepaid expenses" and "accrued expenses", or adopt alternative accounts such as "prepayments", "other receivables", "prepayments" and "other payables", which are essentially the same, do not follow the concept of assets and liabilities, and do not meet the requirements of the new standards.