recording of sale

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2011 in case of export sale,whether sale should be recorded on shipment date (date of let export order)or ex-factory date (date on which goods move from factory)?

further if there is any discount ( termed in books as settlement discount) on sale to foreign party, whether sale should be booked at gross inflow (i.e. sale price including discount value ) or net inflow (i.e, sale value less discount).
please reply.

Guest

Guest (Expert)

25 June 2011
Sale should be recorded on the Date when Goods are removed from the factory, as Delivery of Goods commences thereon.

Sale value must be recorded including any settlement discount.

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2011 dear sunil, as per AS 9 revenue should be recognised if there is no uncertainty on receiving of sale price.

then how we can book sale since there is always risk of loss of goods in transit and generally in case of export sale control and ownership tranferred to foreign party only after delivey to marine cargo i.e. after let export order.

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Guest

Guest (Expert)

25 June 2011
Sale takes place when Property in goods passes to buyer. Sale has nothing to do with the Risk of Loss of Goods in Transit. So if Goods are apportioned at the time of its removal & at that time Property in Goods passes to the Buyer, sale is completed & consequently it must be recored.

In case, if it is specifically stipulated that Property in goods would pass on the Let Export Order Date, then till date, Seller would be the owner & sale would be recorded on shipment date [when property in goods actually passes].