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How to treat cash discount on purchases? I have understood cash discount on sales but confused in purchases?
Like we will do variable consideration or record cash discount received only when payment is done?Question 2:
Is trade discount shown on invoice?Question 3:
As we have studied according to IFRS-15, variable consideration is done by supplier on past experience of customer of either availing discount or not? My question is that sales invoices is on the assumptions of the supplier of it is only net of trade discount and the supplier records the sales according to variable consideration in his accounts only?Q1 and Q3 :I thought this were answered in my last reply here:
https://opentuition.com/topic/discounts-13/
The purchase invoice is recorded using the amount shown by the seller. Cash discounts are sorted out later where necessary spending on whether the discounts are actually awarded or not.
Q2 it often is, but does not have to be. A trade discount is simply is simply a negotiated price.
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