14 December 2009
a co. sells set top box on receiving security deposit. the security deposit is non refundable. plz advice whether the security deposit will be treated as revenue recognition or will it be split over a period of time... your answer should be based on AS..
14 December 2009
As per AS.9 until Risk & Reward associated with the good is transfer to buyer, Revenue cannot be recognised, at the same it cannot be split over a period becoz as per AS.12 if a monetary grant is received which is subject to fullfilment of any obligation, until such conditions are satified such deposit as to be show as asset. In this case until the good is transfer to the buyer, show as Deposit later adjust with sale amount.
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