Revenue Recognition
This query is : Resolved
29 April 2010
The electricity company has charged higher amount for electricity for number of years. The high court has given decision in favour of company i.e. customer to give back the excess money collected in some installment within some years. So, electricity co. required to give refund for number of years. Then how to recognise this revenue. Company should recognise whole amount in single year or over a number of year.
29 April 2010
if you have claimed the excess amt paid as an expense then it will credit to P&L thus will add to income and will be taxable
29 April 2010
questions not clear but as per i know this questions.
Electricity company want to refund the excess money collected earlier years.
So when ecxess money collected its trf to General reserve so now this refund also adhusted with genral reserve not in pl a/c
Electricity company want to refund the excess money collected earlier years.
So when ecxess money collected its trf to General reserve so now this refund also adhusted with genral reserve not in pl a/c
29 April 2010
My view, the refund from the department is previously claimed as expenses in the last year. so you can show as other income in the P&l a/c
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