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    Addendum To Handout 2

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    Angie S. Rosales
    This document provides additional details on revenue recognition related to bill and hold sales, layaway sales, and installment sales under IFRS 15. For bill and hold sales, revenue is recognized when the customer obtains control of the product, which requires that the product be ready for delivery, identified as belonging to the customer, and that the seller cannot direct the product to another customer. For layaway sales, revenue is recognized when the goods are delivered to the customer after final payment. For installment sales, revenue from the sales price is recognized at the date of sale, while interest revenue is recognized over time using the effective interest method.

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    Addendum To Handout 2

    Uploaded by

    Angie S. Rosales
    36 views1 page
    This document provides additional details on revenue recognition related to bill and hold sales, layaway sales, and installment sales under IFRS 15. For bill and hold sales, revenue is recognized when the customer obtains control of the product, which requires that the product be ready for delivery, identified as belonging to the customer, and that the seller cannot direct the product to another customer. For layaway sales, revenue is recognized when the goods are delivered to the customer after final payment. For installment sales, revenue from the sales price is recognized at the date of sale, while interest revenue is recognized over time using the effective interest method.

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    Addendum to Handout 2

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    This document provides additional details on revenue recognition related to bill and hold sales, layaway sales, and installment sales under IFRS 15. For bill and hold sales, revenue is recognized when the customer obtains control of the product, which requires that the product be ready for delivery, identified as belonging to the customer, and that the seller cannot direct the product to another customer. For layaway sales, revenue is recognized when the goods are delivered to the customer after final payment. For installment sales, revenue from the sales price is recognized at the date of sale, while interest revenue is recognized over time using the effective interest method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    36 views1 page

    Addendum To Handout 2

    Uploaded by

    Angie S. Rosales
    This document provides additional details on revenue recognition related to bill and hold sales, layaway sales, and installment sales under IFRS 15. For bill and hold sales, revenue is recognized when the customer obtains control of the product, which requires that the product be ready for delivery, identified as belonging to the customer, and that the seller cannot direct the product to another customer. For layaway sales, revenue is recognized when the goods are delivered to the customer after final payment. For installment sales, revenue from the sales price is recognized at the date of sale, while interest revenue is recognized over time using the effective interest method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    ADDENDUM TO HANDOUT NO.

    2 – ACCOUNTS RECEIVABLE

    OTHER ISSUES ON REVENUE RECOGNITION (IFRS 15)

    1. Bill and hold sales


     A ‘bill and hold’ arrangement is a contract under which an entity bills a customer for a product but the entity
    retains physical possession of the product until it is transferred to the customer at a point in time in the future.
     Revenue is recognized when the customer have obtained control of a product. A customer has obtained control
    when all of the following criteria are met:
    (a) The reason for the bill-and-hold arrangement must be substantive;
    (b) The product must be identified separately as belonging to the customer;
    (c) The product is currently ready for physical transfer to the customer; and
    (d) The entity cannot have the ability to use the product or to direct it to another customer.

    2. Layaway sales
     These are sales where the goods are delivered only when the buyer has paid the final installment in a series of
    payments.
     Revenue from such sales is recognized when the goods are delivered.

    3. Installment sales
     Revenue attributable to the sales price, exclusive of interest, is recognized at the date of sale.
     The sale price is the present value of the consideration, determined by discounting the installments receivable
    at the imputed rate of interest. The interest element is recognized as revenue as it is earned using the effective
    interest method.

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