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Sale with right of return

This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.

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March 24, 2021 at 3:24 pm #615129
dvamfire
Member
- Topics: 36
- Replies: 29
hello sir… when there is a sale with right of return (eg, can return before 30 days)
so the initial measurement will be
DR cash
CR refund liability
but, what is the initial measurement for inventory?
after 30 day, we bring back the asset right? why is it like that?
March 25, 2021 at 3:24 pm #615192
Stephen Widberg
Keymaster
- Topics: 16
- Replies: 3409
If it is likely that goods will be returned:
Dr Cash Cr Refund liability
At SFP date, the inventory will not be physically present for the count and valuation, so we have to recognise inventory currently with customer:
Dr Inventory (at cost) Cr COS
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