Thread highlighting the importance of reading revenue recognition policies (and also other important ones like depreciation and inventory policies) in the annual report (1/6)
#Polycab Ltd which is the market leader in Wires and Cables segment has a different revenue recognition policy vis-a-vis its peers, whereby they book revenues in P&L on dispatch of goods while its peers recognize revenue when the goods are delivered. (2/6)
The below picture highlights the revenue recognition policy of Havells taken from their FY20 Annual Report (3/6)
This is from KEI Industries FY19 Annual Report(AR for FY20 is not out yet). (4/6)
This picture is from Finolex Cables FY19 Annual Report (5/6)
The below picture is from the DRHP of Polycab which highlights the Qualified Opinion of auditors in FY17 regarding under/over accrual of revenues which in my opinion goes on to show that management of Polycab might be booking revenues aggressively vs its peers. (6/6)
@suru27 @ashwinidamani @varadhar1 @abhymurarka @tapak7 @contrarianEPS Please share your views about this.
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