Advance payment for the contract

This topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.

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May 27, 2019 at 3:41 pm #517555
nikaido
Member
- Topics: 41
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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: 7235
Hi,

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

Thanks
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