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TECHNICAL ARTICLE: USING THE BUSINESS MODEL OF A CO….

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › TECHNICAL ARTICLE: USING THE BUSINESS MODEL OF A CO….

  • This topic has 2 replies, 2 voices, and was last updated 5 years ago by Stephen Widberg.
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  • Author
    Posts
  • October 20, 2019 at 10:42 pm #550300
    ginetta86
    Participant
    • Topics: 18
    • Replies: 40
    • ☆☆

    Hi,

    I have taken this from the SBR Technical article – Using the business model of a company to help analyse its performance.

    It states: “To qualify for an amortised cost classification, the financial asset must be held to collect contractual cash flows rather than be held with a view to selling the asset to realise a profit or loss. For example, trade receivables held by a manufacturing entity are likely to fall within the ‘hold to collect’ business model if the trade receivables do not contain a significant financing component in accordance with IFRS 15 Revenue from Contracts with Customers”

    Don’t seem to understand what it means ” if the trade receivables do not contain a significant financing component in accordance with IFRS 15 Revenue from Contracts with Customers”

    Could you please explain?

    Many thanks

    October 21, 2019 at 9:14 am #550328
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    This would be very rare

    An example would be a store that offers four years interest free credit.

    October 21, 2019 at 9:14 am #550329
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    TestTest

  • Author
    Posts
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