Regarding the revenue recognition for sale of digital signature to be used for multiple years, how will the company issuing the signature recognise in its books of accounts? After the sale, the company is not servicing the customer, its only giving a software and a key to the customer which the latter can use for specified period. Will it be considered as a product and the entire amount be recognised upfront or need to be distributed over the life of the product sold?
1 Replies
NANDURI RAVI SURYA NARAYANA MU
(ACCOUNTANT)
(194 Points)
Replied 31 March 2009
Dear
I will tell you one best example suppose you have Televesions manufactring unit, you sell the TVS to the authorised dealers, but in that sale comprise some either gurantee or warantee for extent of some years as you said some limted period. Instead of that you book the sale as a revenue for that relevant F.Y. The same as your digital signature.
For validty of the DSC, please you ignore. Let you book that is main income for the relevant F.Y.
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