Ias 18

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May 2, 2015 at 9:57 pm #243713
alighere
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Hi Mike.
I don’t understand this paragraph in IAS 18
If the inflow of cash or cash equivalents is deferred, the fair value of the consideration receivable is less than the nominal amount of cash and cash equivalents to be received, and discounting is appropriate. This would occur, for instance, if the seller is providing interest-free credit to the buyer or is charging a below-market rate of interest.
May 2, 2015 at 11:57 pm #243720
MikeLittle
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Which bit do you not understand?
Put very simply, if the cash involved in the question is not payable immediately, then we need to discount
Do you need more than that?
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