04 February 2008
If i have some amt of credit in my DEPB.. then should i value this at my period end. Is there any standard or interpretation on this. I want some wrtten text.. Plz help...
04 February 2008
Reproduced below is what appeared in CA magazine April 2007. This is self explanatory.
There is also an opinion of the Expert Advisory Committee on the accounting treatment of DEPB benefit, wherein it has been opined that the credit under DEPB Scheme should be recognised as income when the exports (against which the credit has been granted) are made provided the criteria for recognition of revenue under AS 9 have been fulfilled (query No. 28 of Vol. XX of Compendium of Opinions, page 96).
In the said opinion, the Committee has stated, inter alia, the following: “Under the facts and circumstances of the query, the DEPB credit should be recognised in the books of account when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist. In the case of DEPB credit on post-export basis when the company applies for the credit on realisation of export proceeds and the credit is to be utilised for imports by the company,there seems to be no such significant uncertainty and, therefore, the DEPB credit should be recognised in the year in which the export was made in accordance with paragraph 6 above.”