Passing item

Amounts received or spent in the name or for the account of someone else are referred to as transitory items. The obligation and the intention to pass on the money must already exist at the inflow or outflow of the amount.

Definition / explanation

Amounts of money that one company receives for the account and on behalf of another company are known as transitory items. The company collects or disburses this external money only temporarily. It acts as a trustee, not for its own name and account.

Im Rahmen einer Einnahmenüberschussrechnung (EÜR) werden durchlaufende Posten nicht betrachtet. Sie haben also keinen Einfluss auf die Determination of profits. Sie sind erfolgsneutral und gelten nicht als Betriebsausgaben oder Betriebseinnahmen, daher wird auf durchlaufende Posten keine value added tax raised.

Proof of where the funds come from must be provided to the tax office. In addition, it must be proven when and for what purpose they were taken and passed on. In addition, names and addresses are required.

Examples of transitory items

The items in transit include, for example:

  • Withheld taxes and social security contributions of the employees (must be paid to the tax office or the respective health insurance company)
  • Court or enforcement costs that lawyers and notaries pay for their clients
  • Builders' fees paid by architects

The transitory items do not include operating expenses, such as postage and packaging costs incurred, billed to customers, and telephone or travel expenses that are reimbursed by third parties. These expenses are usually not made in the name of a third party, but for your own account.

Continuous items in the balance sheet

In accounting, transitory items on the assets side and liabilities side are to be shown with identical amounts. It must be possible to allocate these cash flows using identical names or other information. A separate account is required to record the items in transit.

Summary

  • Temporary receipt or disbursement of amounts for the account and in the name of a third party
  • are not recorded as operating income or operating expenses
  • Transit items are not profitable and are not subject to sales tax
  • to be recognized in the balance sheet on the assets and liabilities side with identical amounts
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