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    KimberJune's Avatar
    KimberJune Posts: 6, Reputation: 1
    New Member
    		  
    #1

    Nov 9, 2009, 08:27 PM
    How to recognize revenue under IFRS
    I now how to recognize revenue under GAPP but unsure of the changes to IFRS. I am currently working on a huge problem and a portion of the problem asks the following:

    When a customer purchases a car they must make a down payment of 10,000 upon order receipt, and two annual payments of 27500 starting 1 yr after delivery.

    I am a little confused how I should account for this sale under IFRS
    Please help .
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #2

    Nov 9, 2009, 09:53 PM

    It appears from the problem that the transaction resembles with installment sales. It would be prudent to calculate deferred gross profit on the transaction and record the realized gross profit on the installments received.

    Another aspect may be like a lease type sale. In this case, there can be a gross profit on sale as well as interest income.
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