Interested in re-export trade, inquiring if revenue still exceeds expenditure in re-export trade and under what circumstances revenue exceeds expenditure or expenditure exceeds revenue. The best answer points out that the revenue and expenditure of re-export trade cannot be generalized. Traditionally, revenue usually exceeds expenditure, but now the global trade environment is complex, and various factors such as protectionism, logistics costs, and exchange rates have a combined impact, requiring case-by-case analysis.
Confirmation of Re-export Trade Revenue is Confusing, How Exactly Should It Be Confirmed?
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My company is involved in re-export trade, and we have always been uncertain about revenue recognition. I know that revenue recognition for general trade is relatively simple, but re-export trade involves goods not entering the country, and the fund flow and logistics are more complex, sometimes involving multiple transactions. I would like to ask, how should revenue be recognized for re-export trade? Are there any specific standards or methods? I hope experienced individuals can share their insights.
Trade Expert Insights Answers
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
Revenue recognition for re-export trade generally follows the provisions in Enterprise Accounting Standards No. 14 - Revenue (2017 Revision), adopting a five-step model. The first step is to identify the contract with the customer, clarifying the contract terms, rights, and obligations with all parties to the transaction. The second step is to identify distinct performance obligations in the contract, such as whether the company is responsible for goods transportation, insurance, and other different obligations. The third step is to determine the transaction price, considering various variable considerations, price concessions, and other factors. The fourth step is to allocate the transaction price to each distinct performance obligation; if there are multiple obligations, the price should be allocated reasonably. The fifth step is to recognize revenue when each distinct performance obligation is fulfilled; when obligations such as goods delivery and risk transfer are completed, corresponding revenue should be recognized. For example, when control of the goods is transferred to the downstream buyer, and it is expected that payment will be received, revenue can be recognized. The key to recognizing revenue in re-export trade lies in accurately judging the transfer of control and the fulfillment of the contract.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
Revenue is typically recognized when the significant risks and rewards related to the ownership of the goods are transferred to the buyer. For instance, when the goods are delivered to the carrier for shipment to the buyer, this condition is generally met.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
It depends on the contract. If the contract clearly stipulates that revenue recognition conditions are met at a certain point, such as when the goods arrive at the designated location or customs clearance is completed, then it should be handled according to the contract.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
In re-export trade, when the company has fulfilled its obligations and it is highly probable that the corresponding payment will be received, revenue can also be recognized. For example, if the company has accurately provided the goods information to the buyer, and the buyer has confirmed acceptance.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
Focus on the control of the goods. When control is transferred, it signifies that the company has completed its main work, and recognizing revenue at this point is more appropriate, for instance, when the buyer can independently dispose of the goods.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
From a cash flow perspective, when payment is received or the right to receive payment is obtained, and all related procedures for the goods have been completed, revenue can be considered for recognition.
Michael ZhangYears of service：10Customer Rating：5.0
Customs Clearance SpecialistStart a Chat
Generally, it should be combined with the trade process. For example, when an intermediary resells the goods to the end customer, and the handover of goods is completed during transit, revenue can be recognized.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
If the quality of the goods has been inspected and is qualified, and the buyer has no objections, and other regular conditions are met, such as other requirements stipulated in the contract being fulfilled, then revenue can be recognized.
Richard WuYears of service：8Customer Rating：5.0
Global Trade Operations ExpertStart a Chat
If the company has provided the buyer with relevant documents such as the delivery order, enabling the buyer to effectively control the goods, revenue can also be recognized.