Import Purchase
This query is : Resolved
21 January 2011
For, Import Purchase accounting which date is relevant for accounting entry.
1. goods reached to the Port
2. Goods Reached to the ICD
3. Date on which Custom Duty Paid
4. Date on which Out of Charge order Received from the Custom Department
or
5. Goods reached to the importer's Godown.
Which day's Exchange rate we should consider for the accounting purpose??
1. goods reached to the Port
2. Goods Reached to the ICD
3. Date on which Custom Duty Paid
4. Date on which Out of Charge order Received from the Custom Department
or
5. Goods reached to the importer's Godown.
Which day's Exchange rate we should consider for the accounting purpose??
22 January 2011
date of transaction will be the date on which ownership is transferred. Exchange rate is taken on the date of transaction.
23 January 2011
I am of the opinion that date of customs out of charge should be taken as date of import. There is no point in booking purchase based on bill entry date or the date on which cargo reached port or
ICD. Cargo remains under customs custody untill Out of charge order is given by customs authority.
As regards exchange rate, Customs Deptt. declares exchange rates for Import and Export every month. For whole of the month the exchange rate remains the same. It is advisable that while booking purchase, one should consider Exchange rate prevailant on the date of filing bill of entry. Customs deptt also take in to consideration date on which bill of entry is filed for the purpose of collection import duties. Please also consult your auditors for confirmation of above facts as myself is not a CA
ICD. Cargo remains under customs custody untill Out of charge order is given by customs authority.
As regards exchange rate, Customs Deptt. declares exchange rates for Import and Export every month. For whole of the month the exchange rate remains the same. It is advisable that while booking purchase, one should consider Exchange rate prevailant on the date of filing bill of entry. Customs deptt also take in to consideration date on which bill of entry is filed for the purpose of collection import duties. Please also consult your auditors for confirmation of above facts as myself is not a CA
24 January 2011
when ownership is considered to be transferred.
1. day on which custom duty paid or
2. day on whcih out or charge order received from customs department
3. day on which goods reached to the importer's godown.
Kindly reply sir.
1. day on which custom duty paid or
2. day on whcih out or charge order received from customs department
3. day on which goods reached to the importer's godown.
Kindly reply sir.
07 February 2011
Sir,
When ownership is considered to be transferred in case import purchase of goods (inventory)
1. day on which cutom duty paid; or
2. day on which out of charge order received from customs department; or
3. day on which goods reached to the importer's godown.
When ownership is considered to be transferred in case import purchase of goods (inventory)
1. day on which cutom duty paid; or
2. day on which out of charge order received from customs department; or
3. day on which goods reached to the importer's godown.
29 July 2024
In the context of import purchases of goods, the point at which ownership is considered to be transferred for accounting purposes generally depends on the terms of the sale and relevant accounting standards. For inventory accounting and financial reporting, the critical aspects to consider are:
### **1. Day on Which Customs Duty is Paid**
The payment of customs duty alone does not determine the transfer of ownership. The duty is a regulatory and financial obligation and is often not directly linked to the point at which ownership transfers.
### **2. Day on Which "Out of Charge" Order is Received from Customs Department**
In practice, for accounting purposes, the day on which the customs authorities issue an "Out of Charge" order is often considered the point at which the ownership of goods is deemed to have been transferred. This order signifies that the goods have cleared customs and are free for delivery, which means the legal title to the goods has been transferred to the importer.
### **3. Day on Which Goods Reach the Importer's Godown**
While the physical possession of goods is important, in accounting terms, the transfer of ownership is often associated with the legal title rather than just physical possession. Hence, while the goods reaching the godown is important for inventory control, it typically does not determine the point of ownership transfer.
### **General Practice in Accounting and Reporting**
**According to Accounting Standards (e.g., AS-2 or IFRS):**
- **Ownership Transfer:** Ownership of goods is generally considered to have been transferred when the goods have cleared customs, and the legal title has been transferred. Therefore, the "Out of Charge" order date is commonly used to recognize the transfer of ownership.
- **Inventory Recognition:** The value of inventory should be recorded when the risks and rewards of ownership have passed to the importer. This usually aligns with the "Out of Charge" order date, assuming all costs up to that point, including customs duties and other associated costs, have been incurred.
### **Conclusion**
**The Day on Which the "Out of Charge" Order is Received from Customs Department** is typically considered the point of ownership transfer for import purchases of inventory. This is because the "Out of Charge" order signifies that the goods have been cleared for delivery, thus transferring the legal ownership to the importer.
However, always ensure to follow specific contractual terms and consult applicable accounting standards or regulations that may apply to your specific situation.
### **1. Day on Which Customs Duty is Paid**
The payment of customs duty alone does not determine the transfer of ownership. The duty is a regulatory and financial obligation and is often not directly linked to the point at which ownership transfers.
### **2. Day on Which "Out of Charge" Order is Received from Customs Department**
In practice, for accounting purposes, the day on which the customs authorities issue an "Out of Charge" order is often considered the point at which the ownership of goods is deemed to have been transferred. This order signifies that the goods have cleared customs and are free for delivery, which means the legal title to the goods has been transferred to the importer.
### **3. Day on Which Goods Reach the Importer's Godown**
While the physical possession of goods is important, in accounting terms, the transfer of ownership is often associated with the legal title rather than just physical possession. Hence, while the goods reaching the godown is important for inventory control, it typically does not determine the point of ownership transfer.
### **General Practice in Accounting and Reporting**
**According to Accounting Standards (e.g., AS-2 or IFRS):**
- **Ownership Transfer:** Ownership of goods is generally considered to have been transferred when the goods have cleared customs, and the legal title has been transferred. Therefore, the "Out of Charge" order date is commonly used to recognize the transfer of ownership.
- **Inventory Recognition:** The value of inventory should be recorded when the risks and rewards of ownership have passed to the importer. This usually aligns with the "Out of Charge" order date, assuming all costs up to that point, including customs duties and other associated costs, have been incurred.
### **Conclusion**
**The Day on Which the "Out of Charge" Order is Received from Customs Department** is typically considered the point of ownership transfer for import purchases of inventory. This is because the "Out of Charge" order signifies that the goods have been cleared for delivery, thus transferring the legal ownership to the importer.
However, always ensure to follow specific contractual terms and consult applicable accounting standards or regulations that may apply to your specific situation.
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