Any accountants in here?

[Jikx]

Hehe.. just a stupid question, do Trade Discounts come under AASB118?

eg In a business, you purchase $1000 for goods, but pay only $950. You credit $950 from Cash in bank, and $1000 for Inventory, and $50 to discount revenue.

But this doesn't appear to fit under the definition in AASB118 for revenue (sale of goods)!

But it still is revenue.. hmmmmmmmmmmmmmmmmmmmmmmm



thanks

 

[doctorj]

They've changed the numbers this year - I've got no idea what it is this year, but last year it was under AASB 1004, "Liabilities Forgiven" or something to that affect.

 

[Jikx]

Thanks for the reply doctorj, further research into AASB1004 shows that it has morphed to apply only to non-profit organisations now!

But the key word "Liabilities Forgiven" was a catalyst in persuading me into looking further into the problem. It appears it is a simple case of looking under the wrong standards. AASB102 inventories plainly says to enter the discounted amount in!

 

[doctorj]

I will look around the office for a copy of the new standards. Remember, as part of the change (IFRS) this year, all the numbering has changed. Previously they were 1XXX, now, I think they are 1XX.

Your entries as posted in the parent are correct.

Dr Inventory 1000
Cr Cash 950
Cr Discount Received 50

AFAIK, these have not changed in the new standards. Will confirm for you as soon as I can find the new standards.