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Waza,
If the billing date is in line with the revenue recognition rules, there is no issue parking the COGS in a balance sheet account till billing is done. While RR rules could be local to the country's Accounting Standards, and needs to be complied with, the associated matching principle stipulates that cost and revenue should be recognized in the same period. In this instance, if RR has to happen in the same period as delivery as per the local AP, then the accrual should be for Revenue rather than Cost. Else, moving the COGS to a BS account is perfectly in line with accounting standards. To me, this scenario looks like a Revenue Accrual requirement.
In my implementation, the billing date is configured to be the RR date and the same is derived by calculating the transportation lead time based on a new field for title transfer condition (rather than use the inco-terms) - At Port, On Vessel, At Customer, At Border, etc. On delivery, the billing date is calculated and applied through an exit.
Rajan.
---------------Original Message---------------
From: wnash7658
Sent: Wednesday, September 29, 2010 9:14 PM
Subject: Next Month Invoice
> Hello,
>
> Further, I assume this will be posting to the Balance Sheet and not the P/L. So at end of year the true COGS value is wrong. P/L will role into retained earnings and therefore retained earnings will be wrong and maybe the dividends will be increased.
>
> I hope your accountants know this and also hope the auditors find this issue. I now see many companies trying to follow this method, but I don't think IFRS or IAS allows this function at the moment.
>
> Regards
>
>
> Waza
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