Q. A bullion merchant received 1 kg gold on 20.03.24 @ 65lakhs, received bill from suppler but rate was not settled for gold and to be decided at future rate after 20 days. Accounting treatment

Question

A bullion merchant received 1 kg gold on 20.03.2024 @ 65,00,000/- and received the bill from the suppler but the rate was not settled for gold and to be decided at the future rate after 20 days. As on 09.04.2024, the gold rqte is settled between the parties @ 72,00,000/-. The supplier raised a bill for rate difference for Rs. 7,00,000/-  as on 09.04.2024. Pl tell whether this invoice of rate difference  effect is  to be considered in pr yr or cr yr 24-25 by the purchaser. whether any document is required.

regards

CA Sanjay Jain

Answer 1

As per accounting standard 9, the revenue is to be recognised when, the risks and rewards are transferred and there is no significant uncertainty regarding the amount of consideration that would be derived from the sale of the goods. So keeping that in mind the revenue should be recorded.