Sales to employees with a discount

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Margo101
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Joined: 02 Feb 2023, 14:59

Sales to employees with a discount

Post by Margo101 »

Hi everyone!
Please clarify the following issue for me:
If the company provides goods or services to it's employees for free or with a discount, should it be recognised as:
1) Extra payroll (or similar expense on employees) and revenue, or
2) Should be deducted from revenue (and expenses as well) as a material right to a customer.
Which option is acceptable? As for me, scenario 2 is more conservative. However, IAS 19 define that employees benefits could also be in non-cash form (as free o subsidised goods).
Thank you in advance!
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Marek Muc
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Re: Sales to employees with a discount

Post by Marek Muc »

are these the same goods as the company sells to 'regular' customers?
Margo101
Posts: 9
Joined: 02 Feb 2023, 14:59

Re: Sales to employees with a discount

Post by Margo101 »

Yes, normal goods and services
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Marek Muc
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Re: Sales to employees with a discount

Post by Marek Muc »

There are no explicit requirements in this area. I would recognise revenue in the transaction price (i.e. discounted price) and recognise an employee benefit expense as the difference between price paid by employee and cost of goods/services provided (or nil if the company still makes a profit on the sale)
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