Sale on consignment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2013 What is a Sale on Consignment ? How it is Accounted for.

How the same has to be shown in the stock and how to revalue for the same. kindly explain.

CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)
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05 June 2013 This form of sale take place where principal-agent relationship exist.
No sale is recorded by principal unless the goods are sold by agent on behalf of principal.
Turnover of principal is sale value of goods and that of agent is only commission income.
It is shown in the stock of principal disclosing separately in notes the amount of inventory held under consignment.

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2013 We are Exporter and mostly sale goods on consignment. What if the goods return by the party recd. back in part, as import and payment has been recd. in full before receiving the import. How this all transaction is recorded in the books. can u pls. elaborate in detail.

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CA Sourabh Agarwal

CA Sourabh Agarwal (Expert)
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06 June 2013 If Payment is received in full after sale, it means (in my opinion) that risks are transferred. So sale can be booked.
Subsequently if part goods are returned it can be termed as sales return. Original recognition will not be altered.