abhishreshthaa
New member
REVENUE RECOGNITION
Income/ Expenditure is accounted on accrual basis except in the following cases :
i) In the case of non performing assets, income is recognized on cash basis; in terms of guidelines of the Reserve Bank of India, where recovery is not adequate to upgrade the Non Performing Assets accounts by way of regularization, such recovery is being appropriated towards the principal / book balance in the first instance and towards interest dues thereafter. In respect of Non performing investments, the same accounting treatment as above is followed except otherwise agreed.
In the case of advances guaranteed by the Central / State Governments, income is recognized on cash basis if the interest is not realized for more than 90 days, though the same are treated as Performing assets.
Interest of securities which is due and not paid for period of more than 90 days is recognized on realization basis as per RBI guidelines.
Dividend on investment in shares, unit of mutual funds, commission from insurance and depository participants business, income from sale of mutual fund products, income from merchant banking transactions, locker rent, commission on government business etc., are accounted on cash /realization basis.
Income relating credit card is accounted on the basis of bills raised.
In the case of matured term deposits, interest is provided as and when such deposits are renewed.
Expenses arising out claims in respect of employee matters under dispute / negotiation are accounted during the year of final settlement / determination.
In the case of suit filed accounts legal expenses are charged to the profit and loss accounts. Similarly, at the time of recovery of legal expenses in respect of such suit filed accounts, the amount recovered is accounted as income.
Income/ Expenditure is accounted on accrual basis except in the following cases :
i) In the case of non performing assets, income is recognized on cash basis; in terms of guidelines of the Reserve Bank of India, where recovery is not adequate to upgrade the Non Performing Assets accounts by way of regularization, such recovery is being appropriated towards the principal / book balance in the first instance and towards interest dues thereafter. In respect of Non performing investments, the same accounting treatment as above is followed except otherwise agreed.
In the case of advances guaranteed by the Central / State Governments, income is recognized on cash basis if the interest is not realized for more than 90 days, though the same are treated as Performing assets.
Interest of securities which is due and not paid for period of more than 90 days is recognized on realization basis as per RBI guidelines.
Dividend on investment in shares, unit of mutual funds, commission from insurance and depository participants business, income from sale of mutual fund products, income from merchant banking transactions, locker rent, commission on government business etc., are accounted on cash /realization basis.
Income relating credit card is accounted on the basis of bills raised.
In the case of matured term deposits, interest is provided as and when such deposits are renewed.
Expenses arising out claims in respect of employee matters under dispute / negotiation are accounted during the year of final settlement / determination.
In the case of suit filed accounts legal expenses are charged to the profit and loss accounts. Similarly, at the time of recovery of legal expenses in respect of such suit filed accounts, the amount recovered is accounted as income.