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Hi all ;D,
I am having trouble with IFRS 15, I understood the examples given in youtube Opentuition (Phone company) for revenue recognition.But what if we are talking about Retail in IFRS 15.
1). If a customer buy a shirt from your shop, is that considered as contract?And how does IFRS 15 applies in this scenario? Say, the company has 30 days refund policy when you buy a sweater cost $100
2). How do we identify the standalone price for this obligation?
3). I assume we could not recognize the $100 fully right? as there is separate obligation of “refund policy”Any more details on IFRS 15 on retail would be greatly appreciated. 🙂 thank you
IFRS 15 is only relevant for long-term contracts (where the revenue needs spreading over more than one accounting period), and to the situation where a discount is offered for early payment of a sale on credit.
Ordinary retail sales fall into neither of these two categories and are not affected by IFRS 15.
Refunds for goods returned are nothing to do with IFRS 15 and are accounted for in the normal way as explained elsewhere in my notes and lectures.
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