In Royalty Accounts, explain what does it means “ THE RIGHT TO RECOUP SHORTWORKINGS”
| To avoid hardships to producers, in the event of shortfall of outputs, agreements are sometimes made to guarantee the landlord a minimum rent.
Such agreements often contain a provision that if the rent due ( calculated on the tonnage produced,etc) does not reach the minimum amount, the DIFFERENCE or DEFICIENCY may be carried forward and deducted from the payment of future royalties. These agreements are referred to as a right to recoup shortworkings and usually this right only extends over a limited period. |
Related Posts
- Section 169 Companies Act 1965-Profit & Loss Account, Balance Sheet & Directors' Report
- Details Of Ninth Schedule Companies Act 1965(Act No 125)
- Accounting Treatment For The Increase Or (Decrease) Of Provision For Doubtful Debts
- Different Methods of Creating Provision for Stock / Inventory Obsolescence (Part 5)
- Provision For Sales Discount /Discount Allowed
Comments are closed now.