Machine unit being acquired, later to be transferred to customer

[Dexter87]

Hi

I would like some clarity with respect to the following transaction in the light of IFRSs.

This company is involved in manufacturing goods for customers. One of the customers requested goods of a certain specification. In order to manufacture the goods, a machine unit is to be imported. The customer has agreed to pay the cost of the goods, as well as the cost of machine. The contract with customer covers both, sales of goods and sale of machine. The contract states that the machine shall be the ownership of the customer and shall transferred to the customer within a certain period, as per the customer's demand.

In view of the above, as the company acquiring the machine for customer:
1) what should be the treatment of the machine being acquired?
2) Can it be recorded as a non-current asset? In that case, depreciation would be charged and how would the transfer to customer be recorded in books? would it be treated as disposal? But this machine is the property of the customer and not the company's property.
3) Or can it be recorded as an inventory, as it is to be sold to the customer?

Thanks.

[Marek Muc]

Hi, I think this is covered in https://ifrscommunity.com/knowledge-bas ... sideration

If the customer controls the equipment used in the production process, then this equipment won't be recognised by your company at all.