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Receivables

22. Feb 2013
1

Hello

How would I proceed if the goods we sell in the form of commission sales (wine), have not been sold by the wine seller by the end of the year and the company has not received cash income. Under IFRS, the amount of income is not recognized until the following year after receiving the money? If we cannot call this a sale, can we have a receivable?

 

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Submitted by Mladek on Sat, 02/23/2013 - 07:20
Hello,

Goods at a reseller should remain in your inventory.  They are simply reclassified from finished good to consigned goods (Dr. Goods on Consignment / Cr. Finished Goods). 

When the goods a sold by the reseller to the final consumer (the obligating the reseller to pay you), you would recognize a receivable, revenue and cost of sales, and derecognize the inventory (Dr. Trade Receivable / Cr. Revenue // Dr. Cost of Sales / Cr. Goods on Consignment).

Provided you have that information. 

If you do not have that information, you would recognize revenue when you get paid (Dr. Cash / Cr. Revenue // Dr. Cost of Sales / Cr. Goods on Consignment)

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