Case: At the buyer's request, Rangoli Furnishings Ltd has invoiced goods but agreed to hold them in its warehouse until the buyer's new showroom is ready. Title has passed, the buyer has accepted billing, the goods are identified and ready for delivery, and the buyer acknowledges the deferred delivery instructions. Under AS 9, revenue should be recognised:

Correct answer: C) When the buyer accepts title and billing, even though delivery is delayed

Explanation

Under AS 9, revenue from sale of goods is recognised when significant risks and rewards of ownership are transferred and no significant uncertainty exists regarding consideration. In a bill-and-hold sale where delivery is delayed at the buyer's request and the buyer takes title and accepts billing, revenue is recognised notwithstanding that physical delivery has not been completed.