Revenue recognition
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 May 2015
Whether Revenue can be Recognised without raising invoice?
08 May 2015
Normally NO.
To stretch the imagination to other EXTREME.
In some contracts a certain sum is received as ADVANCE....there is one more condition/stipulation in the said contract that unless the work of certain amount is done "Running Account Bill" can not be raised... say 50 lakh.
As at the year end...the situation may arise....advance is received...yet the work if not 50 lakh but say around 35 lakh is done... the revenue of 35 lakh may be recognised without even raising the invoice subject to however MATERIALITY of the amount of 35lakh
To stretch the imagination to other EXTREME.
In some contracts a certain sum is received as ADVANCE....there is one more condition/stipulation in the said contract that unless the work of certain amount is done "Running Account Bill" can not be raised... say 50 lakh.
As at the year end...the situation may arise....advance is received...yet the work if not 50 lakh but say around 35 lakh is done... the revenue of 35 lakh may be recognised without even raising the invoice subject to however MATERIALITY of the amount of 35lakh
08 May 2015
Yes, only in those cases where AS-7 is mandatory.
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