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my question is based on moston co sept/dec 2015 note number 1
revenue include 3 million sale made on 1 jan 2015 of maturing good which are not biological assets. the carrying amount of these goods at date of sale was2 million . moston is still in possession of the good (but they have not been included in the inventory count) and has an unexpected option to repurchase them at any time in the next three years. in three years time the gods are expected to be worth 5 million . the repurchase price will be the original selling price plus interest @10% per annum from the date of sale to the date of repurchase.
my question is how do we treat this in statement of financial position and statement of profit or loss ? i’ve see the acca solution but they only provide the sopl solution . i wonder how do we treat this in sofp .
We would need to recognise the inventory at the lower of cost and NRV as in substance we still control the inventory and so it should be treated as ours in the financial statements.