It is a general practice that companies follow the despatch date from the factory gate as the date of sale incase of domestic sales. Can the same recognition criteria be applied for Export sales?


What do u mean by FOB or CIF contract? Has it got any impact on the revenue recongition timing and measurement ??


What are the disclosures in respect of Export sales as per Sch Vi of companies act?

Posted 3 years, 9 months ago by HS VEDANTA DESHIKA


Revenue is recognised when risk passes to buyer. In case of domestic sales, risk is passed once goods leaves the factory gates. However we have to verify the Purchase Order and see conditions as to when the risk passes.

Same rule applies in Export Sales. Since PO requires goods on FOB to pass the risk. Revenue is recognised once goods are dispatched on FOB of CIF basis.

FOB is Frieght on Board and CIF is Cost Insurance Freight. Since risk passes on happening of FOB or CIF delivery the revenue and purchase is recognised after verifying the Bill of Entry or Airway Bill.

Posted 3 years, 9 months ago by CA Pulkit Sharma


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