Abstract

Ramesh Kumar (Ramesh), accountant at Anirudh Furniture Spare Parts Limited (AFSPL), went on leave for 2 months (April and May) for personal reasons. Before going on leave, he assigned the task of revenue recognition for the two months to Avinash Kumar, his assistant. After returning, Ramesh found that the revenue recognition statement submitted by Avinash had not followed the actual guidelines that Ramesh followed. Hence, he started to reconcile the revenue figures by validating the record books and cross verifying with buyers. The present case study is helpful in discussing the concept of revenue recognition and the guidelines specified under Accounting Standard-9 - Revenue Recognition from the sale of goods.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The concept of revenue recognition in accounting
• The importance of revenue recognition in decision making
• The guidelines specified in Accounting Standard-9 (Revenue Recognition) in recognizing revenue from the sale of goods

Keywords

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