Dear Professional colleagues,
On going through definition of "turnover" under new companies act, the definition goes to say that value of goods "realised" from supply of services & goods. If that be the case, dont you think there is a big mess? There is no way to find amount realised from supply of goods and service for a company from the financial statements because, in financial statements, company will present "Revenue" as per the schedule vi and revenue for that purpose will be revenue as per AS 9. Imagine that a company bags contract on 31st march and it recieves 20Crores as advance - this will make the company turnover of Rs 20 croers as per Companies act and other provisions will apply accordingly
CA GOUTAM BAID (Partner Manish Sukhani & Co) 07 October 2015
As per definition u/s 2(91) of Companies Act 2013, if turnover will be conidered only on realisation from supply of goods or from rendering of services advance amount received cannot be considered as turnover at all as it cannot be said that the amount received in advance is realisation from supply of goods.
CA Goutam Baid,