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Advance payment for the contract

Ttaha7y ago
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
P2-D2P2-D2Tutor7y ago#1
Hi, It will be an interest expense as it is the unwinding of the discount. Thanks
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