Other income

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Al-Mahamud
Posts: 30
Joined: 10 Feb 2021, 07:37

Other income

Post by Al-Mahamud »

A local company is selling products of a foreign company as general trader but exceptional scenario is that the foreign company is reimbursing some portion of selling and marketing expenses of the local company. This reimbursement is nothing but an amount that is calculated on the invoice at fixed rate. Let say, invoice is 100 CU, reimbursement amount is 15% of the 100. The 15% rate is fixed. Now the local company is showing the reimbursement of expenses as other income. My confusion, is not it cash discount for local company considering substance over form principle?
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Marek Muc
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Re: Other income

Post by Marek Muc »

definitely looks like a reduction of cost of sold inventory - per analogy to revenue side described here:

https://ifrscommunity.com/knowledge-bas ... a-customer
Al-Mahamud
Posts: 30
Joined: 10 Feb 2021, 07:37

Re: Other income

Post by Al-Mahamud »

Thanks a lot dear
JRSB
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Re: Other income

Post by JRSB »

:lol:
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