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Case Code: CLFIN014
Case Length: 5 pages
Period: -
Pub Date: 2020
Teaching Note:Available
Subject : Finance
Organization :Suresh Electronics and Electricals
Industry : Home Appliances & Consumer Products
Countries : India

Revenue Recognition - The Challenge of Subjectivity in Delivery Conditions



Suresh Kumar (Suresh) started a wholesale and retail electronics and home appliances business Suresh Electronics and Electricals (SEE) in the year 2018. The revenue streams of SEE were divided into three different categories – one, retail electronics and home appliance shops that placed fixed orders every month; two, other retail electronics and electrical shops that purchased from SEE according to demand; and three revenue from direct sales to customers.

The present case study can be helpful in understanding the concept of revenue recognition and the application of Accounting Standard - 9 (Revenue Recognition) and to discuss how to recognize revenues based on the nature of buyers' transactions and the nature of products offered.
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  • The application of Accounting Standard-9 (Revenue Recognition).
  • The recognition of revenue based on the nature of relationship with buyers.
  • The recognition of revenue based on the nature of products offered for sale.
Suresh Kumar (Suresh) ran an electronic and electric wholesale and retail business. During the fourth quarter of the financial year 2019-20, he received orders from retail shop owners for air conditioners, refrigerators, washing machines, geysers, LED television sets, food processors, electric kettles, toasters, microwave ovens, and rice cookers.

Besides the wholesale business, Suresh also had a retail business where he sold electronics and home appliances directly to customers ..


Accounting; Accounting principles; Accounting Concepts; Revenue Recognition; Accounting Standard-9; Terms of Revenue Recognition; Profit and loss account; balance sheet

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