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A Chartered Accountant (CA), Dinesh, is retained by a company for a monthly fee of Rs. 20000/- on 1st January 2020, for 1 year, for routine tax consulting work. The company's accounting year is from 1st January to 31st December, 2020. In August 2020, Dinesh was assigned the work to prepare project report for availing bank finance for new project by the company. The fees decided mutually (in addition to normal monthly fee for the routine tax consulting work) between the company and Page 3 of 6 Dinesh was Rs. 1,00,000 fixed and 0.5% of the loan amount sectioned which was contemplated to be around Rs. 30 crores. There was no tax consulting work provided by Dinesh for 3 months because of lockdown.
Problem 1: Determine the revenue to be recognised by Dinesh in his accounting books by way fees for calendar year 2020 from this company under the following situations: A. Bank loan is sanctioned. B. Bank loan is yet to be sanctioned.
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