What are the advantages of CIF?
Advantages and Disadvantages of CIF – Cost insurance and Freight. The advantage to the seller is that it can often obtain cheap insurance and then build a larger amount into its selling price. The advantage to the buyer is that it does not have to worry about declaring the shipment to its own insurer.
What is the difference between FOB and CIF?
The abbreviation CIF stands for “cost, insurance and freight,” and FOB means “free on board.” These are terms are used in international trade in relation to shipping, where goods have to be delivered from one destination to another through maritime shipping. The terms are also used for inland and air shipments.
Which of the following criteria must be met to recognize revenue under a bill and hold arrangement?
To recognize revenue in a bill-and-hold arrangement under ASC 606, the seller should assess whether the customer has control of the goods in the arrangement.
Does CIF include duty?
CIF does not include any import duties, VAT, or taxes. It does include all export requirements. Under CIF, the seller must export and pay the costs to ship to your destination port, but you must import and pay all costs associated with the importation.
What are the criteria and factors for recognizing revenue from bill and hold sales?
Seven Criteria: The buyer must commit in writing to buy the goods. The buyer must take on the risk of owning the goods. The buyer must request that delivery is delayed, and they must have a business reason for doing so. Any goods sold under this basis must be finished goods at the time of sale.
Under what circumstances is a seller allowed to recognize revenue under a bill and hold transaction?
A bill and hold transaction is one in which the seller does not ship goods to the buyer, but still records the related revenue. Revenue can only be recognized under this arrangement when a number of strict conditions have been met. Otherwise, there is a risk of fraudulently recognizing revenue too early.
Does CIF include unloading?
Who pays for unloading under CIF? As per the rules under CIF, the seller will pay for all the unloading and loading charges till the nominated place of port and the buyer will remain liable for the unloading charges at the terminal port & costs thereafter.