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Revenue Recognisation

A  sold good to B for $10000 on60 days credit on30.11.14. B  declared bankrupt on25.12.14. A approached you to take your advice whether any provision required for $10000 because B became bankrupt. 

 

You are requested to advise him accounting treatment as per IFRS.

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Question added by Mohammed Mohammed , Senior SAP Consultant , Abyat Mega Store
Date Posted: 2015/01/25
Deleted user
by Deleted user

i don't know

Imran Ahmed Mirza
by Imran Ahmed Mirza , Accounts Supervisor , Value Added Services Corp. client at Jang Group of Newspapers

A provision of bad debts to be recognized with the whole amount $10000 against the customer B

Sahar Alech
by Sahar Alech , Auditor / Financial Manager , Accounting Services Office

I agree with Mr.Sajid As per IAS18 REVENUE RECOGNITION it is better to take provision for that sale

sajid mohammad
by sajid mohammad , Senior Audit assistant

As per IAS18, when there is uncertainty in ultimate collection of amount then revenue recognisaton should be postponed till the time it becomes certain . if already recognized in the books  , then needs to make provision to that extent

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