 Let's see how the revenue with customer is going to be recognized accounting requirements for the revenue. The basic principle is that the revenue should be measured at the fair value of the consideration that has been received when the product and services promised has been provided to the customer. Now that is the basic thing that when a buyer and seller come together they get into an agreement that one is selling the goods the other one is buying the goods. But seller will get the money for that goods which is selling and the buyer will get the goods. So the goods for the buyer is the consideration and the money for the seller is the consideration. Now regarding sale of goods normally revenue is presumed to have been realized when the significant risk and reward have been transferred to the buyer and effective control is passed to the buyer. And when you are selling the goods the important thing is that the risk involved on those goods is and the reward. Risk and reward both. If there is a loss or a loss then the supplier will go towards the buyer and effective control. The control should be with the buyer not with the seller. The seller will dispatch the goods and the buyer will take the responsibility for all reward and risk. Normally what we have to say that when we are buying or selling goods so we have to agree whether it should be FOB destination or FOB shipping point. So in this case FOB destination means that the supplier is supposed to deliver the goods to the premises of the buyer. So the risk till such time the goods reaches to the buyer is risk is involved with the seller. But when it is FOB shipping point it means the buyer will pick the goods from the premises. So thereafter whatever the risk and reward that goes to the buyer. So focus is on control. Revenue is measured at the fair value of the consideration received or receivable. Not necessarily that there and then you got the money. Sometimes we sell on credit so we will receive the money later. The nature, timing and amount of consideration promised by a customer affect the estimates of transaction price. For example if you are buying on cash you might get a better price. But if you are asking for credit obviously then you will have to pay a little more. It depends on what your agreement is. When determining the transaction price an entity shall consider the effects of all the following. Number one variable consideration. Is it one time payment or you pay slowly or you add something when you are paying back to the seller. Constraining estimates of variable consideration. Existence of significant financing components in the contract and non-cash consideration. It happens sometime that you sell the goods and the payment will be let's say in 3-4 installments. In that case you should consider that the value of that money should be the present value. Consideration payable to customer. Amount received on behalf of other parties that is sale tax. Collected on behalf of the principal are not resulted in increasing the equity therefore they do not constitute revenue. You know when we are selling goods we are recovering on behalf of the government sale tax. That is not our revenue because we are collecting on behalf of someone else. Similarly if an agent is selling your products so whatever he is selling is not his revenue. His revenue is going to be the commission only. So the only amount which we record as revenue the money which we are this is our own. The primary issue is accounting for revenue is determining when to recognize the revenue. The timing that's very important when we should recognize the revenue. As a earlier third case when the control passes to the buyer you can recognize your revenue. Revenue is recognized when it is probable that the future economic benefits will follow to the entity and these benefits can be measured reliably. This word reliably is almost everywhere. So in this case the future benefits should goes to the buyer then only you can record your revenue. Sometimes we are selling goods on let's say not necessarily cash but on credit. Somebody says you keep the goods for time being and sell it to us or rather hand it to us later on. So that will not be sale yet unless you deliver the goods and the control passes on to the buyer then it goes to be the revenue. I have 15 identifies the core principle that an entity recognize revenue to depict the transfer of promise goods and services to the customer. When you enter into a contract, do you promise to tell the goods or services to system time the goods and services are transferred to the customer. You cannot record revenue. Then amount that reflects the consideration to which the entity expects to entitled in exchange for those goods and services. Obviously, when there is a sale or rendering of services, so one party is expecting to get the goods, the other party is expecting that in return of those goods, we should get the money. So it all depends the timing at what time at what price we agreed to all these to be discussed and it should be clearly in the contract we are going to make because contract and we can see later on that there are five steps involved. So we can discuss this later on inshallah.