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Discounts

Forums › FIA Forums › FA2 Maintaining Financial Records Forums › Discounts

  • This topic has 4 replies, 2 voices, and was last updated 4 years ago by maximus07.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • June 6, 2021 at 11:06 am #623406
    maximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    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.

    June 6, 2021 at 1:04 pm #623431
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10591
    • ☆☆☆☆☆

    1 – Yes

    2 – Yes

    See examples here:

    https://www.accaglobal.com/in/en/student/exam-support-resources/fundamentals-exams-study-resources/f3/technical-articles/discounts.html

    June 6, 2021 at 1:42 pm #623444
    maximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    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.

    June 6, 2021 at 5:51 pm #623510
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10591
    • ☆☆☆☆☆

    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.

    June 6, 2021 at 7:33 pm #623532
    maximus07
    Participant
    • Topics: 446
    • Replies: 437
    • ☆☆☆☆

    Right sir.

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • The topic ‘Discounts’ is closed to new replies.

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