Regarding treatment of export sales

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CA Bhushan Agrawal (Querist)
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23 July 2012 some export sales were made to a prticular buyer and that buyer refuses to accept the delivery and becomes insolvant. The same goods are sold to another buyer but at 50% discount. What should be the accounting treatment? whether the original sales entry be reversed and the original buyer be credited with full amount of invoice or be credited with 50% of invoice value and 50% be claimed as bad dedts.

Rajesh

Rajesh (Expert)
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23 July 2012 The better course would be to reverse the transaction and account for only the realised amount as sales. As per AS 9 the revenue should be recognised only when the risks and rewards associated with the transfer of property in goods is complete. In this case that has not happened. Please take a decision after reading AS 9.

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CA Bhushan Agrawal

CA Bhushan Agrawal (Querist)
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25 July 2012 Dear Rajesh Ji sincere thanks from my side to resolve the query.

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