Accounting Standarts Revenue Recognition

Accounting Standard- Revenue Recognition Revenere means grass Inflow of cash and recallables arising From sale of goods, rendering of services or interest/lond!! Royalty In short secvenue represents Sale of endity Note:- Ravenue does not include •Revaluation of current Asset / Fixed Asset Cuorrent Uabilities • Profit on sale of fixed asset • Gain on exchange. difference 2 Revenue Recognition deals with "timing" of recording. Revenue In book of AlCA Raveme from sales: If following conditions are satisfied, then. Revenue firom sate should be debe recognised. शक (9) There should be no tom certainity regarding. Conideration and its ultimate Collection and and. Ant (ii) Property under transaction should be transferred. In any case risk & regard reward relating. to oronership should be Erempered. T of goods is delayed at briyo Note :- If delivery Revenge shoreld be seconguisid Drequest, Agreement with buyer Sale eregguind it (9) free home delivery. Dominos Pizza goods core delivered ( Exporter"" Fos" Furke on Bond goods delivered at Part No atom cost ins winre fright (ⅱ) Expote "ZIP" delivery to Custme goods delivered at cupther Place & No es (iv) Flipcart goods delivered at custom place & No If following Conditions are scctis pled CD There should be no uncertarity sugonding Consideration & its its limate Collection and (1ⅱ) Interest Recognised on time basis Dividend recognised-when light to receive dividend crises (ie. Dividend is approved in AGM) porady deeded Royally siecogwhed shen on accrued balsts based on agreement Sul comed Note: If Revehere is owned but not recognised if is considered as advorce.. 7. Disclosure Requirement.. (i) Revenue Recognisation policy should be disclosed. ci. Major, revenue. not recognised should be disclosed Nots Frade chiscovert san should be deduded Arom Gale price Notr If revenue has been recogni led and them gevels are setorned er discount is allowed then sale con not be altered sales rehan or discount should be separately recognised. 4- Revenue from services: If following conditions arce satisfied reverere from Service should be recogwed (1) there should be no concentrinity by regarding. Consideration or its Ultimate Control ca and Sousas should be sendered completly or proportionally If souras have been rendered proportionetly, Pro Rate is adopthred. 5 If prices core sevised with retrospective offert, then Revenue forem peace rovise should be consideria if its ultimate collection is containe Ulimate Collection, past Pistory & expectation of hargement the und the Consi Wered. Revenue. furom Interest / DNBlend / Royalty & should a recogni Accrinting Standcard-2 Valuation of Inventorcy Shaventory means assets held for sale in normal mouse of busines or for Consumption to producing goude or Rendering struκες Finished goods ZuJP Raw Materw goo At Last or NRV Lower At costo NRU Lovea If Finished goods have NRU then-Raws Valueel et cost price If F4. have NRVX Cost thou Row is volund at Replacement Price V= Expected sp. XXX Expected so exp xxx Current market NRU XXY NRV = Expected sp xxx (-) Expected selling Expo (xxx) (Expected cost of Completion (XXX) Note:- Meaning of cost Actualcost Cost Meem/ XXX Materied Cast (excluding taxes on which or Is wwall) XXX + freights XXX + Loading/Unloading charges Cost of Raw Material XXX hlithout expect of Normal loss Cost of Row Materval after effect of Normal Los Cost of input Total input - Normal los aty - Cost effect of Nom Loss XXX -+ Direct labour. XXX + Direct Exp. + Factory Variable Overheads XXX + Factory fixed overheads XXX **based on O/H recovery prate Total cost of finished products XXX Note:- Following are included in cost of stock •Administration OIH. • Abnormal Loss Storage cost • Selling on. • Distribuation OH Borrowing cost Note: If company was earlier including Borrowing Cost in Stock but now it is not including It then we call it as change in Alc policy! Note:- For calculating stock store ledger can be prepared. Using Specified. FIFO or other method of Note: It & specifies G.P. Ratio cost can be Calculated as selling price. -GP = Cost **OH. Recovery rate :- Fixed production OH. [Normal production or Actual producti Whichever is higher