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Sir can you please help me how to treat discount on purchases.
Like we have IFRS-15 for Revenues.Scenario 1:
Supplier thought we will not achieve cash discount according to past experience so he will send us invoice of $200 (no deduction of cash discount of $40). Whereas, we achieve the cash discount by paying in time so supplier will decrease sales by $40. On other hand, customer will record it as discount received of $40. Am I correct?Scenario 2:
Supplier thought we will achieve cash discount according to past experience so he will send us invoice of $160 (after deducting cash discount of $40). However, we had not achieve so supplier will increase sales by 40, on the other hand what will we do as a customer.
Will we increase our purchases by 40?Please help me with this. Thank You.
Yes sir. I gone through this article but it was not much helpful in sense of customers (or buying goods). It is helpful when we have discounts on supplying goods.
The purchaser has to initially record whatever invoice is received. Discounts are sorted out later if the invoiced amount turns out to have been incorrect.
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