Loan license segment accounting
This query is : Resolved
Rahul Kolangde
(Querist)
08 May 2017
Under Loan Licensing Segment in Pharma Industry how is the Accounting done in the books to the company who is manufacturing drugs on behalf of the License holder ? What amount of Sales are booked. What is the difference between Gross Sales Vs Net Sales in Loan Licensing ??
Amol S Joglekar
(Expert)
09 May 2017
Loan liscencing takes the nature of job work. The raw material is supplied by the parent company. The ownership of raw material is NOT transferred to the manufacturing company. Having the balance capacity for manufacturing, the manufacturing company levies the charges for the machine hour...(From accounting view point it is labour charges/job work charges)
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