17 April 2010
sale value 50000, book value 30000. sale consideration to be received 20000 in 1st year , 15000 in 2nd year, 15000 in 3rd year. what is the profit to be considered in current year. Please let me know the clear conceptual understanding on this.
17 April 2010
If titleship if transefered then transectionis complete and sale is made. thus when your ownership got transfer , it will be taxabel transection and doe snot matter when you are making payment
17 April 2010
AGREED WITH MR. SOMANI, AS SOON AS YOU SOLD ANYTHING, TRANSACTION IS COMPLETED. NOW IT IS TAXABLE IN SUCH PERIOD IN WHICH IT IS COMPLETED. IT DOES NOT MATTER WHEN YOU RECD PAYMENT FOR IT.
17 April 2010
as per AS 9 revenue is to be recognised when following two conditions are fulfilled : 1. It is not unreasonable to expect the ultimate collection of revenue; and 2. the performance of the transaction is achieved. In case of sale of goods, the performance of the transaction is achieved when the the seller transfers to the buyer the property in goods and retains no significant control over the goods sold and there is no uncertainty about amount of consideration. Normally when the goods are sold out , at that point only these conditions are checked, and revenue is recognised immediately if these conditions are fulfilled irrespective of the date of receipt of revenue. Revenue accrues here when the sale is made and not when consideration is received. In case u hv further doubt, revert back to me. Regards, CA Shakuntala Chhangani
CAclubindia
