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(((Revenues reported by comparator co. contained ‘other revenues’ that represented reimbursements of costs.
The reimbursements are made, based upon the costs incurred with no added margin.
These revenue and corresponding margins have no effect on net income.
The revenue figures used in calculating my ‘revenue trend’ have these other revenues deducted in order to make better comparisons.)))
Now how should i deal with above situation. Should i write that in ‘Limitations in information gathering’ section
and what else should i do?Can’t get what are you talking. Revenue means sales and do you mean less sales return to arrive at net sales?
OK, Lets make this this clear. Limitation in information gathering means the obstacles that you had while you gathered the information. Like getting any specific reports or industry industry averages. Not just a problem you had finding the sales figure from the financial statements.
The issue in here is very straight forward. Normally the sales figure is included in many parts of the annual report. (not just in income statement). So, look for the sales figure in any other parts of annual report.
If this reimbursements are the costs they spent and for any reason you do not think that it cannot’be considered as revenue, make sure you explain why you don’t think its revenue. Give the revenue recognition criteria (IAS 18) and apply it.
Also, It is important to use the same revenue figure in all of your calculations.If you have any question don’t hesitate to ask.
Cheers
lets say in the Official Income statement , Revenue is 1000
but 100 is other revenues.so i made it 900 and i inserted in my appendix 900
I said in the Appendix i did that because i want to make figures comparableIs this way correct
Companys OFFICIAL Statewment
Revenue 900
Other revenue 100
Total revenue 1000cost of sales (400)
Other costs (100)Net income 500
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