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Good afternoon Sir!
control was transferred on 31 decX0 for goods worth 1m. payment on 31 dec X2. Customer borrows @10%.
revenue entry: 31 dec x0
Dr Recvbles 0.826m
Cr Revenue 0.826mmy question: subsequent unwinding will be made to the receivable and revnenue like:
first unwinding entry 31 dec X1:
Dr Recvbles .0826m
Cr Revenue .0826mis that correct?
thank u!
Yes, although I suppose it could be possible to show the credit as finance income
Ok?
Paragraph 63 of firs 15 appears to cover this point … And it allows a choice of treatments
If the delayed payment is less than 12 months, the entity may adopt the expedient approach and ignore the time value of money and the finance costs implication
However, if the delayed payment is >12 months, that expedient approach appears not to be available
Thus revenue should be recognized taking into account the time value of money and the unrolled discount treated as finance income
Ok?
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