07 September 2007
A company has received export benefits under Duty Exemption Pass Book Scheme (DEPB) against export made by it .The co. is following the policy of recognising it as and when DEPB credit is received by the company.whether it is right?or it is against the accrual principle,acc.to which export benefits should be recognised as soon as export is made by the company rather than when credit is received by the co.please clarify the same on the basis of relevant AS,guidance note etc.
08 September 2007
The Policy followed by the company is not appropriate and is not in line with the AS 9, revenue recognition and also in line with sec 209 of the Companies Act, 1956. The company should recognise the DEPB credit immediately the right to the benefit is accrued to it and in case there is any indication that the recoverablity is doubtful, the same may be postponed in line with AS 9
10 September 2007
As per AS-9, if there is any uncertainty attached to the receipt then the recognition of revenue may be postponed. As per the concept of prudence, account for known losses not for gains..
CAclubindia
