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significant financing component

Hhuma5y ago
Hello What is significant financing component under IFRS 15?
stephenwidbergstephenwidbergTutor5y ago#1
Relevant when assessing the bad debt allowance for RECEIVABLES. Tom buys a chair from a shop for 1,000 on 30 days credit - financing component NOT SIGNIFICANT Mary buys an identical chair from a shop for 1,500 on 4 years 'interest free' credit. Interest free is of course a marketing ploy! SIGNIFICANT FINANCING COMPONENT So where is the dividing line? A judgement call, but more than one year's credit is what I would go for.
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