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Advance payment for the contract

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Advance payment for the contract

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • May 27, 2019 at 3:41 pm #517555
    nikaido
    Member
    • Topics: 41
    • Replies: 89
    • ☆☆

    Hi Chris,

    If the customer has paid us 6000 in advance and we deliver goods after 2 years lets say

    when we increase the liability due to financing component , the amount we take to p and l for two years is it a finance cost or interest income

    Thanks

    May 28, 2019 at 3:12 pm #517689
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    It will be an interest expense as it is the unwinding of the discount.

    Thanks

  • Author
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