Air Freight / Cargo Revenue
Recognizing revenue from cargo shipments carried in the aircraft hold.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable (Freight Agent) | Asset (+) | 28,000.00 | - |
| Cargo / Freight Revenue | Revenue (+) | - | 28,000.00 |
💡 Accountant's Note
Cargo revenue is recognized when the shipment is delivered at the destination — the point at which the performance obligation (transporting the goods from origin to destination) is fulfilled. For multi-segment cargo where different carriers handle different legs, revenue is prorated across carriers. Cargo is billed by weight and volume (chargeable weight = greater of actual weight and dimensional weight).
Practitioner & Systems Framework
💻 ERP Architecture
Cargo bookings are managed through the Cargo Management System (CMS) — Unisys Cargo, IBS iCargo, or CHAMP Cargospot. Revenue is recognized at delivery, generating an invoice to the freight forwarder or agent. The CMS feeds the revenue accounting system at proof of delivery. For cargo on interline flights, revenue is prorated per IATA Cargo proration rules. Cargo revenue is reported separately from passenger revenue — some airlines (e.g., Etihad Cargo, Qatar Airways Cargo) operate dedicated cargo businesses with separate P&L reporting.
⚠️ Audit Flags
Auditors test cargo revenue against airway bills and proof of delivery documentation. Reconcile total cargo revenue to CMS flight manifests and delivery confirmations. For perishable cargo (time-sensitive goods) with premium rates, confirm the specialized service is distinct and recognized at delivery. Test interline cargo proration for consistency with IATA rules. Assess whether cargo capacity sold as a committed block-space agreement requires ratable recognition over the agreement period rather than per-shipment recognition.
📄 Required Documentation
Airway bills (AWBs) by flight and shipment, proof of delivery confirmations, CMS revenue report, interline proration workings, block-space agreement terms (for IFRS 15 performance obligation assessment), cargo agent accounts receivable aging, and cargo yield report (revenue per kilogram).
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