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?
discount on revenue
Re: discount on revenue
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?
Re: discount on revenue
in any case, you need to decrease revenue, does this result in debit balance for total of revenue reported by this entity?
Re: discount on revenue
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.
Re: discount on revenue
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?
does this result in debit balance for total of revenue reported by this entity?
Re: discount on revenue
too bad, a disclosure explaining what happened is strongly recommended