Knock off the sales Invoice amount with Purchase amount

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Aleem443
Posts: 2
Joined: 15 Jun 2020, 12:01

Knock off the sales Invoice amount with Purchase amount

Post by Aleem443 »

Hi,

Thanks in advance.

Can we knock off the sales Invoice amount with Purchase amount, when transaction was type of job work(Sub contracting sales method) with the same party ( Vendor and customer are same) .

For Eg; 'A' Send the Part's through their Tax Invoice ( Purchase ) and IN turn 'B' send the Sales Invoice after Packing (Value Additions) and dispatch to 'A'.
JRSB
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Joined: 01 Mar 2020, 01:10
Location: UK

Re: Knock off the sales Invoice amount with Purchase amount

Post by JRSB »

Why is the same person buying and selling something from/to you? Presumably you add something to it.

Does the contract allow net settlement?
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Marek Muc
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Joined: 15 Oct 2018, 17:21
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Re: Knock off the sales Invoice amount with Purchase amount

Post by Marek Muc »

it seems that net presentation is more suitable, either under principal vs agent considerations or consideration payable to a customer

https://ifrscommunity.com/knowledge-bas ... ss-vs-net/

https://ifrscommunity.com/knowledge-bas ... a-customer

What is the commercial/tax/other reason for structuring this transaction this way? Why wouldn't A just pay for the packaging service?
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