ADMS 3585 Chapter Notes - Chapter 6: Consignor, Operating Expense, Consignee

• School: York University
• Department: Administrative Studies
• Course: ADMS 3585
• Professor: Professor Alcalde

Document Summary

If tra(cid:374)sa(cid:272)tio(cid:374) at ar(cid:373)"s le(cid:374)gth(cid:894)(cid:271)et(cid:449)ee(cid:374) u(cid:374)related parties(cid:895), assu(cid:373)e value of what is given up approximates value received. If not, then it probabl(cid:455) is(cid:374)"t at ar(cid:373)"s le(cid:374)gth: ex. 3 p. 276: concessionary terms, terms negotiated by party to the contract more favorable than normal, ex. pg. 277 box: why does this matter for acct purposes, concessionary terms complicate accounting; more lenient than usual. & meant to induce sales: can create additional obligations or risk has not yet passed, and create more complications; sometimes indicate no sale occur. Important analysis whether selling terms are normal business practice or special; must obtain understanding of normal business practice (look at documentation of selling practices, past transaction) Illustration 6-1 p. 277 differentiates normal selling & abnormal concession: ex. 5 p. 279: why does this matter for acct purposes, enforceable promise that result from sale may create performance obligations recognized in statement of financial position.