Contra revenue vs expense

[Nowim]

What are the diferrences between contra revenue and expenses. Is there any specific guidance in IFRS?

[JRSB]

Do you mean discounts given to customers? IFRS 15 tells you revenue is net of discounts. Therefore a discount is not an expense.

Is that what you mean?

[JRSB]

IFRS 15.47

[Nowim]

If I have some expenses incurred specifically for a particular customer and I invoice that for reimbursement by customer, can I book these expenses as contra?

[JRSB]

As in disbursements that you incur and then charge to the customer?

[Nowim]

Right

[JRSB]

If you have an agreement with a supplier to buy something, and then charge that to your own customer later, it's no different to the other costs going into the provision of the service. Revenue and other side cost of sales. There may be specific scenarios where you are the agent or something but would need more info.

[Nowim]

Thanks

[Marek Muc]

Can you provide more details on the nature of the arrangement and recharged expenses, Nowim?

[Nowim]

Say your staff is working in client premises to provide some services where they are using stationeries. You invoice the client for the stationery. Will it be contra?

[Marek Muc]

No, it's simply an expense incurred in providing the service.

[Nowim]

Thanks. It is my understanding as well. But, is there any IAS, IFRS references, interpretation on this.

[Marek Muc]

Nothing specific really. I'd say that, in IFRS 15 terms, you need to determine whether your company acts as an agent between the stationery seller and your client, by applying this guidance: https://ifrscommunity.com/knowledge-bas ... ss-vs-net/

[Nowim]

Thanks Marek.