How revenue to be recognised in the case of retail sellers who provide some benefits to customers like reward points , gift vouchers , cash back offer ( online shopping ), one plus one offer , buy one get second at discount .
What is the treatment as per AS-9, AS-29 OR Indian GAAP ?
The value of such benefits or the cost of the product(in case of free stuffs) needs to be reduced from the revenue made through that sale. For money back offers, there is a requirement to provide for the same till the money back period according to AS 9 - "In the case of retail sales offering a guarantee of “money back if not completely satisfied” it may be appropriate to recognise the sale but to make a suitable provision for returns based on previous experience."
T R SOOD & CO
New Delhi
CA Inter
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SMJ global advisors pvt ltd
New Delhi
B.Com
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CAclubindia
