Revenue recognition in case of export

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mansi (Querist)
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18 October 2012 What are the different rules of Revenue Recognition in case of Export Sale especially where sale is done on different terms every-time say CIF , FOB etc.

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
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18 October 2012 Revenue should be recognized when the following criteria are fulfilled.

1.)The seller of the goods had transferred the significant risks & rewards of ownership to the buyer.
2.)No significant uncertainty exists regards the followings.
a)the consideration that will be derived from the sale of goods.
b)the associated cost incurred or to be incurred in producing or purchasing of goods.
c)the extent to which the goods may be retained.
3.)It is not unseasonable to expect ultimate collection of the consideration.

mansi

mansi (Querist)
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18 October 2012 Sir , My question is if export sale is made on 31st March & despatched from factory to port & received to customer in Dubai on 2nd April , what will be the point of time when ownership will be transferred to customer & what will be the criteria to decide in which period sale should be recognised.

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
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18 October 2012 The date of dispatch i.e., 31st march will be considered as the time when ownership transferred.
sale will be recognized at time of despatch from factory to port.

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