AS - 9

AS 240 views 7 replies

Ashish P Mehta

Article Assistant

48 Points Joined July 2016

There is one company ABC ltd. which export the goods. The company have contract with customer to sale goods on DAP incoterm. It means that it will be responsibility of ABC ltd. in realtion to goods in transit till it reaches to customer's place. Now on 31st march company exports the goods and invoice is generated but it is not reached to customer's place so whether company should book it as sales or not? if not then state the season

Replies (7)

C Hariish

4 Points Joined May 2017

no doubt it's sales only

C Hariish

4 Points Joined May 2017

becoz of the fact 😉

CA Rashmi Gandhi

Chartered Accountant

86505 Points Joined April 2011

Its sale & same is to be recognised in books. No matter that goods are in transit, if u have finalized terms & raised an invoice then same is sale.

Ashish P Mehta

Article Assistant

48 Points Joined July 2016

but don't you think so risk and reward is not transferred?
Here the incoterm is DAP hence i think the risk & reward will be transferred when it reaches to customer's place and hence company should book it as goods in transit as on 31st march and as sale when it reaches to customer place
please state your opinions

CA Rashmi Gandhi

Chartered Accountant

86505 Points Joined April 2011

Ya its correct but it depends on terms & conditions of transaction. If risk & rewards are still in hands of company then same is to treated as goods in transit on 31 March.

But if all risk & rewards transferred then it is sale

Ashish P Mehta

Article Assistant

48 Points Joined July 2016

yes i agree with you
thanks for reply to both of you

CA. Sunil Gokhale

Teacher

1484 Points Joined May 2015

Sale of movable property is complete only when goods are delivered as per terms of contract to the buyer or his agent. Till then the property in the goods is with the seller. Looking at the facts sale cannot be recognized as per AS 9.