I would argue that any demand for payment prior to the issue of...

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04/04/21

13:49

Post #: 52243746
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Originally posted by amv2013: ↑

I am always happy to be corrected however not on this occasion. Certainly CIF, CFR and FOB are INCOTERMS, as are many others (FAS, EXW, FCA). They represent the rules for the interpretation of trade formulated by the International Chamber of Commerce. Yes they deal with the transfer of risk and provide for the respective responsibilities of the buyer and seller. They are far from "just shorthand ways of detailing when transfer of title (or ownership)". As I commented earlier transfer of title/ownership under CIF/CFR/FOB sales contracts all takes place at the same time that is upon loading aboard the carrying vessel.

Your comment that "the Seller may only invoice the Buyer after transfer of ownership" is also not correct. Where the nature of a sales contract can clearly identify both the goods and the precise value of those goods, the commercial invoice will be raised and the Bill of Lading negotiated (to be presented to the bank if the transaction is the subject of a letter or credit) prior to ownership having taken place.
I would agree that with commodities that are bought/sold based upon its weight or volume that can only be determined once the goods have been loaded then the commercial invoice would be raised thereafter thus in effect after ownership has taken place, however in respect of all other sales the commercial invoice is raised prior to transfer of ownership.
On that which we can agree is the can of worms. There are certainly many variations to sales contracts and recognition of revenue that is what I had originally raised as an enquiry to determine whether it was possible for a shipment being loaded early April to be recognised in Q1 earnings report.

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I would argue that any demand for payment prior to the issue of the goods is a pre-payment request / proforma invoice etc. and these are not the same as an invoice. Most modern computer systems will not allow the issue of an invoice prior to the issue of the goods and this invoice is what generates the revenue posting.

PLS Price at posting: $1.09 Sentiment: Hold Disclosure: Held
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