- This topic has 1 reply, 1 voice, and was last updated 2 weeks ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
Suppose I am providing maintenance services for a period of 3 years for $1,200. In a YouTube lecture by a reputed tutor, I saw the transaction being recorded as:
Dr Cash $1,200
Cr Deferred Income $1,200
and at the end of each year:
Dr Deferred Income $400
Cr Sales $400.
However, shouldn’t we consider whether there is a significant financing component, calculate the present value of the consideration, and then unwind the discount each year?
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.