Revenue Recognition of ISP Business


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Sep 4, 2016
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Bangladesh
Hello!

Our business is to provide broadband internet service to residential, corporate user & re-seller.
During the installation, we charge a one time, non-refundable charge as "Installation Charge". And the monthly recurring charge is paid by the customer every month. Resellers pay only the bandwidth price every month.

Q # 1
How should I categorize sales or service revenue? Is there any special rules for "One Time Installation Charge"?


We buy internet bandwidth from ISP/IIG company.
And other materials (cables, switch, routers, network tools & equipment) from suppliers which are used-

a) to establish broadband connection to residential & corporate customers. These materials are low cost, owned by us & related to "installation charge".

b) to establish connection to resellers. These materials are costly, owned by us & there is no "installation charge"

Q # 2
What would be the procedure to record "Cost of Sales/Service"? And how would be the "inventory system"?


Thanks in advance.
 
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