The recognition of entrepot trade revenue usually follows the following points. First, it should be based on the contract agreement. The conditions of goods delivery and payment methods specified in the contract are important bases. If the contract stipulates that revenue is recognized when the goods are delivered to the final customer, then this shall prevail.
Secondly, the transfer of risks and rewards is crucial. When the major risks and rewards of the goods are transferred to the buyer, and the company no longer retains the continuing management rights related to the ownership and no longer exercises effective control over the sold goods, revenue can be recognized. For example, when the goods have passed the ship's rail and the risks are transferred to the other party, this condition is met.
Furthermore, the revenue amount can be reliably measured. It is necessary to clarify the prices of goods, transportation costs, relevant taxes and fees involved in the entrepot trade, and accurately calculate the revenue amount. At the same time, economic benefits are likely to flow into the enterprise, that is, there is a reasonable assurance of receiving the payment for goods.
Professional consultant answers
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
The recognition of entrepot trade revenue usually follows the following points. First, it should be based on the contract agreement. The conditions of goods delivery and payment methods specified in the contract are important bases. If the contract stipulates that revenue is recognized when the goods are delivered to the final customer, then this shall prevail.
Secondly, the transfer of risks and rewards is crucial. When the major risks and rewards of the goods are transferred to the buyer, and the company no longer retains the continuing management rights related to the ownership and no longer exercises effective control over the sold goods, revenue can be recognized. For example, when the goods have passed the ship's rail and the risks are transferred to the other party, this condition is met.
Furthermore, the revenue amount can be reliably measured. It is necessary to clarify the prices of goods, transportation costs, relevant taxes and fees involved in the entrepot trade, and accurately calculate the revenue amount. At the same time, economic benefits are likely to flow into the enterprise, that is, there is a reasonable assurance of receiving the payment for goods.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
You can look at the transfer of the control of goods. When you can prove that the control of goods has been given to the buyer, you can recognize the revenue. For example, if the buyer can dispose of the goods at will, it can basically be confirmed.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Pay attention to the payment collection situation. If most of the payment for goods has been received and the delivery of goods is also completed, generally, the revenue can also be recognized. But note that both payment collection and delivery should comply with the contract provisions.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
When recognizing revenue, ensure that the relevant costs can be reliably accounted for, otherwise the revenue recognition may be inaccurate. The accounting costs include the purchase price of goods, transportation and handling expenses, etc.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
Check the trade documents, such as bills of lading, commercial invoices, etc. These documents can prove the completion of trade links and assist in judging the timing of revenue recognition.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Entrepot trade involves multiple parties. Communication with upstream and downstream is very important to ensure that all parties are consistent in confirming the transaction progress, which is conducive to accurate revenue recognition.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Follow the accounting standards. Generally, the Accounting Standards for Business Enterprises are followed in China, and judge whether the conditions for revenue recognition are met according to the requirements of the standards.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Consider the tax impact. Different revenue recognition times may affect taxation. It is necessary to reasonably recognize revenue in combination with tax regulations to avoid tax risks.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Establish a complete business record system to record the whole process of the transaction, which is convenient for accurately judging the time and amount of revenue recognition.