Accounting Treatment for Revenue Recognition for Sales With and Without Return Policies Under Ind AS Framework
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- Last Updated on 18 December, 2024
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Ind AS 115 provides detailed guidance on accounting for revenue recognition when control of a product is transferred with a right of return. It specifies that revenue should be recognized for the expected consideration, excluding returns. The standard requires the recognition of a refund liability and an asset for the right to recover returned products. Both the refund liability and the asset must be updated periodically based on changes in return expectations. This document clarifies how return policies impact revenue recognition, refund liabilities, and related asset management, offering businesses clear direction for accounting for sales with or without return rights in accordance with Ind AS 115.
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