Friends,
Please help me with this. In a software developing company, goods (for example: Arduino boards) are recieved from customers for the purpose of developing software. However, the item is received for the limited purpose of developing the software. These goods are to be returned to the customers after completion of the development phase. What is the Accounting Treatment for the goods received? Should i show these goods in the VAT Return?
Goods received are incomplete and no right is going to establish on such goods the said right is remain up to the customer despite company require to develop such goods. In other words your company just provide professional service for development of software. There is no purchase or sale of goods. It is the same as repairing of motor bike etc...
Maintaining only register (whether manual or electronically) showing only quantitative details of goods received for development and given after development or otherwise is enough.
When invoice raised against customer for providing the said service is the time to account for the same in regular books of accounts.
Arpan Bohra & Co
Hyderabad
CA Inter
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Saini Pati Shah & Co LLP, Chartered Accountants
Mumbai
CA Final
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CCI
Pro
CAclubindia
