COMMERCE 3AB3 Chapter Notes - Chapter 6: Consignee, Barter, Current Asset
2 Dec 2014
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What is being received: normally specified in sales agreements. What is being sold: sales transactions often involve transfer of goods, services, or both (known as deliverables, accounting is different under each situation. Sale of goods: physical assets with finite point when control transfers to buyer (generally with transfer of legal title and possession) Sale of services: legal title and possession irrelevant. Sale of goods and/or services combinations: complexity in measuring each component of bundled sales or multiple deliverables. What is being received: consideration being received for goods and/or services sold is either: Non-monetary (another good/service, also known as barter: generally assume that the transaction is at arm"s length (between unrelated parties) such that: Value of deliverables sold = value of consideration received. Inflow of economic benefits (e. g. cash, receivables, etc) Arising from ordinary activities: there are two main conceptual views on how to account for revenues/sales:
