00:01
So we are going to understand today about revenue and expense recognition concept.
00:25
Okay.
00:26
So what does this concept say is let's understand.
00:34
So we will write with a different thing.
00:47
It is a methodology which enables an entity to record the exact.
01:16
The expenses as well as income in which they have either incurred, they have been incurred and earned respectively.
02:15
So we will understand this concept through a very simpler example.
02:22
However, you can write down this onto your notebooks for future difference.
02:26
Let's suppose there is a person mr.
02:30
A and there is a second person mr.
02:35
B who is a supplier who is a supplier of raw material to mr.
02:45
A now what happens mr.
02:47
A frequently purchases raw material from mr.
02:50
B so mr.
02:52
A said okay you can transfer me raw material okay that is a worth of rupees thousand dollars but i will pay you in some later time like one month time or we can say next year okay because that will be relevant for our example for understanding the concept okay in next year okay now what happens this thousand dollars will be recognized as expense in current year instead of next financial year.
03:40
So that is what our concept says...
