10-17-2004, 05:52 PM
There are certain questions
1. Can the stage of completion of product and cost to complete the order be measured?
2. Are the orders from parent company renewed after sending specific products or paki company works on number of products side by side i.e at a given date are there several products under process or one by one?
3. What are the terms of parent company accepting the product to be true. i.e. is there any provision that product will not be accepted.
4. It appears that branch can not sale the product independently therefore the reimbursement of expenses obviously covers the servicing fee i.e revenue of branch. If the reimbursement is made monthly, revenue should be recognised monthly unless otherwise there are some spefic terms and condition.
As per the accounting standard 18 para 20 revenue be recognised when amount and stage of completion and associated cost can be measured reliably at balance sheet date also it is probable that economic benefits related to MAKING OF PRODUCT will flow to enterprise (branch)
I hope if not clear i have tried to broaden up the vision...
1. Can the stage of completion of product and cost to complete the order be measured?
2. Are the orders from parent company renewed after sending specific products or paki company works on number of products side by side i.e at a given date are there several products under process or one by one?
3. What are the terms of parent company accepting the product to be true. i.e. is there any provision that product will not be accepted.
4. It appears that branch can not sale the product independently therefore the reimbursement of expenses obviously covers the servicing fee i.e revenue of branch. If the reimbursement is made monthly, revenue should be recognised monthly unless otherwise there are some spefic terms and condition.
As per the accounting standard 18 para 20 revenue be recognised when amount and stage of completion and associated cost can be measured reliably at balance sheet date also it is probable that economic benefits related to MAKING OF PRODUCT will flow to enterprise (branch)
I hope if not clear i have tried to broaden up the vision...
