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Old 02-24-2013, 12:37 AM
Mess Mess is offline
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Expenses should be counted during the period the services were performed regardless of how they are paid.

If you paid a retainer the previous year, you just had an asset and the law firm had a liability.

If you paid the following year, then you had a liability for services performed, it was still an expense for that year. Whether you owe the law firm, or paid with your credit card, you still incurred the expense.

As far as receiving costs, I am not certain how CRA prefers this, but I can find out on Monday. For now, I would suggest that if you claimed the expense in 2012 and received the costs award in 2013, you balance the books by declaring that award as income in 2013. This would only be for the amount you claimed as an expense.
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