We have Export under EX. (ex works, which means , the price quoted applies only at the point of origin and the seller agrees to place the goods at the disposal of the buyer at the specified place on the date or within the period fixed. All other charges are for the account of the buyer.
My query is when to recognise revenue in this case ?
But I feel it cant be on bill of lading date, as risk & rewward passes to the buyer on the date when goods leaves the factory (a place). Then Why we need to wait till bill of lading date ?
31 December 2010
In your case, The seller agrees to place the goods at the disposal of the buyer at the specified place on the date or within the period fixed.
It means that the discharge of liabilities at the delievery of the goods at the place which is specified by the buyer.
If practically all risks and rewards is tranferred to buyer after the dispatch of the goods from factory, then you can recognise the revenue. In case of ex factory sale, it is theoritically correct to recognise the revenue after the dispatch of goods from factory...but ask one question to yourself that " WHO WILL BEAR THE LOSS IF GOODS LOST IN TRANSIT TO PORT FROM FACTORY?" IF SELLER- then dont recognise the revenue at the time of dispatch. IF BUYER- recognise the revenue. (see the contract terms for the same)
But as far as my experience is concern, the seller normally upload the goods to the vessel and prepare the bill of lading. So on that date itself, seller used to recognise the revenue.
CAclubindia
