Incoterms for goods

The Incoterms rules are silent on the issue of when title in the goods passes from seller to buyer. This should be dealt with elsewhere in the commercial agreement.

The issue of title to the goods is related to that of revenue recognition, which matters to those organisations who want the best figures in their financial reports.

Revenue recognition is defined by accounting standards such as GAAP, and the point of delivery (as defined by the Incoterms rule) is one factor in the decision on this matter.

Hence rules such as DAP and DAT would tend to be disadvantageous in this respect.