Revenue recognition
This query is : Resolved
22 April 2013
One Company has to receive some consideration from the other company for several years say for 3 years, how ever that receiving company booked excess revenue in first 2 yrs than actual revenue due to wrong interpretation of contract agreement, now the company can adjust such excess against actul revenue in 3rd year.
Eg: actual Revenue for 3 years is 4lacs, 6lacs and 5lacs, how ever in 1st year company recognised 5.5 lacs and paid tax on that, in 2nd year 8lacs and paid tax on such income also, now company came to know that it recognised excees of 3.5 lacs so , it wants to recognise income of (5-3.5=1.5 lacs only in 3rd year. can it do so? assume that due date for filing return u/s 139(5) is expired already for first two years
Eg: actual Revenue for 3 years is 4lacs, 6lacs and 5lacs, how ever in 1st year company recognised 5.5 lacs and paid tax on that, in 2nd year 8lacs and paid tax on such income also, now company came to know that it recognised excees of 3.5 lacs so , it wants to recognise income of (5-3.5=1.5 lacs only in 3rd year. can it do so? assume that due date for filing return u/s 139(5) is expired already for first two years
30 June 2013
Yes it can be done. Now, what you have to do is send your statement of account to the company and the company will write to you that the actual payable or receivable by you is Rs.???? So you can reverse the revenue.
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