A Note on Prior Period Income

Abstract

The study examined prior period income reported by sample firms during the period AY 2010-11 to 2014-15. 1,251 firm years observation were made, out of which 943 firm years observed prior period income reported, reporting a total value of Rs. 28,752.87 crores of prior period income. Out of total prior period income reported, provisions written back contributed to Rs. 25,393.27 crores of prior period income, repressing almost 88 percent of the prior period income with Bharat Heavy Electricals Ltd. writing back Rs. 1,756.66 crores of provisions in a single accounting year 2014-15. The study highlights prior period income, non-cash prior period income, various provisions written back during the study period.