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AS-9
Accountancy
If a company sales goods on credit and have uncertainty then it is not recognised as revenue and meanwhile the year ends so is there any accounting treatment for this situation
Answers (7)
If the uncertainty relates to the timing of cash collection rather than the collectability itself, the company may use the installment sales method. Under this method, revenue is recognized proportionately as cash is collected from the customer. This approach allows for more accurate revenue recognition when there is uncertainty about the timing of cash inflows.
Surya Prakash
If the uncertainty relates to the timing of cash collection rather than the collectability itself, the company may use the installment sales method. Under this method, revenue is recognized proportionately as cash is collected from the customer. This approach allows for more accurate revenue recognition when there is uncertainty about the timing of cash inflows.
I am asking if out of three conditions of revenue recognition two are not fulfilled (I.e certainty and measurability ) then what will it's accounting treatment at the end of financial year?
Thread Starter
Atharv SankliyaI am asking if out of three conditions of revenue recognition two are not fulfilled (I.e certainty and measurability ) then what will it's accounting treatment at the end of financial year?
Revenue will not be recognised. It will be recognised only when the conditions are satisfied.
CA Suraj Lakhotia Admin
Revenue will not be recognised. It will be recognised only when the conditions are satisfied.
But the goods are delivered to the customer and the condition are not satisfied at the end of FY
CA Suraj Lakhotia Admin
Revenue will not be recognised. It will be recognised only when the conditions are satisfied.
So does we have to record it as goods with customer in assets side of balance sheet
CA Suraj Lakhotia Admin
Revenue will not be recognised. It will be recognised only when the conditions are satisfied.
Or does it is recorded as loss because the ownership of good is transferred but the company doesnot received it's consideration
Thread Starter
Atharv SankliyaOr does it is recorded as loss because the ownership of good is transferred but the company doesnot received it's consideration
Inventory is transferred. So automatically the Cost of goods sold would be higher. No revenue is recognised. So loss would get booked automatically.
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