10 October 2022
Hi , Can u share file when export and import should recognise based on what supporting. Eg DAP, CIF,DDP-- based on delivery receipt Exwork -- Factory outward A file which help both for import and export --- will be great helpful
06 July 2024
Certainly! Understanding when exports and imports should be recognized typically depends on the INCO terms (International Commercial Terms) agreed upon between the buyer and seller. These terms outline the responsibilities and obligations of each party regarding the delivery of goods. Here’s a brief overview of common INCO terms and when recognition typically occurs:
### Export Recognition
1. **EXW (Ex Works)**: - Recognition: When goods are made available at the seller’s premises or another named place (factory, warehouse, etc.). - Supporting Document: Delivery Receipt or Shipping Advice indicating the transfer of goods.
2. **FCA (Free Carrier)**: - Recognition: When goods are handed over to the carrier at the named place. - Supporting Document: Bill of Lading or Airway Bill.
3. **FAS (Free Alongside Ship)**: - Recognition: When goods are placed alongside the vessel at the named port of shipment. - Supporting Document: Mate’s Receipt.
4. **FOB (Free on Board)**: - Recognition: When goods pass the ship's rail at the named port of shipment. - Supporting Document: Bill of Lading.
5. **CFR (Cost and Freight)**: - Recognition: When goods pass the ship's rail at the named port of shipment. - Supporting Document: Bill of Lading.
6. **CIF (Cost, Insurance, and Freight)**: - Recognition: When goods pass the ship's rail at the named port of shipment. - Supporting Document: Bill of Lading.
7. **CPT (Carriage Paid To)**: - Recognition: When goods are handed over to the carrier at the named place of destination. - Supporting Document: Bill of Lading or Airway Bill.
8. **CIP (Carriage and Insurance Paid To)**: - Recognition: When goods are handed over to the carrier at the named place of destination. - Supporting Document: Bill of Lading or Airway Bill.
9. **DAT (Delivered at Terminal)**: - Recognition: When goods are unloaded at the named terminal. - Supporting Document: Delivery Receipt.
10. **DAP (Delivered at Place)**: - Recognition: When goods are ready for unloading at the named place of destination. - Supporting Document: Delivery Receipt.
11. **DDP (Delivered Duty Paid)**: - Recognition: When goods are ready for unloading at the named place of destination. - Supporting Document: Delivery Receipt.
### Import Recognition
For imports, recognition generally occurs when control over the goods is transferred to the buyer, which typically happens at the same points outlined above for exports, depending on the agreed INCO terms.
### Documentation
Documentation supporting recognition can include: - **Delivery Receipts**: Confirming receipt or delivery of goods. - **Bill of Lading (B/L)**: Acknowledgment of receipt of goods for shipment. - **Airway Bill (AWB)**: For air freight shipments. - **Mate’s Receipt**: Document issued by the captain of a ship acknowledging receipt of goods.
These documents are crucial for both export and import transactions as they provide evidence of the transfer of control over goods, which is essential for recognizing revenue or expenses appropriately in financial statements.
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