discount on revenue

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daljeet
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Joined: 26 Jan 2021, 04:55

discount on revenue

Post by daljeet »

Hi,

If there is reversal of revenue in subsequent year due to discount given on refurbishment work (recognised over time), the discount is material and may result in revenue to be presented as debit balance.

Assuming this was not assessed as variable consideration at year end.

How do we account and present the discount under IFRS?
JRSB
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Re: discount on revenue

Post by JRSB »

Was the discount a contractual factor the terms of which had been met at year end? Or completely discretionary and a decision was made after year end?
Student of IFRS.
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Marek Muc
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Re: discount on revenue

Post by Marek Muc »

in any case, you need to decrease revenue, does this result in debit balance for total of revenue reported by this entity?
daljeet
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Joined: 26 Jan 2021, 04:55

Re: discount on revenue

Post by daljeet »

Yes the discount may be contractual based on the signed contract in the event the work done did not meet the required standard. However, any estimation of discount amount at this juncture will be without supporting basis.
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Marek Muc
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Re: discount on revenue

Post by Marek Muc »

then it's a performance penalty, to be accounted for as a revenue decrease

does this result in debit balance for total of revenue reported by this entity?
daljeet
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Joined: 26 Jan 2021, 04:55

Re: discount on revenue

Post by daljeet »

Yes it will.
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Marek Muc
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Re: discount on revenue

Post by Marek Muc »

too bad, a disclosure explaining what happened is strongly recommended :)
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