• Register
Search Questions / Answers

Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. You can register with your email or with facebook login in few seconds

Get AccountantAnswer App

What is a multiple‐element transaction?

What is a multiple‐element transaction? Can anyone explain with some practical examples and tell how IAS 18 applies to such transactions?

asked Mar 4, 2013 in IAS 18 - Revenue by shevleenk Level 1 Member (1,200 points)
retagged Apr 23, 2013 by Visio

1 Answer

0 votes
Generally a transactions involving a sale of goods or services give rise to revenue recognition where by you credit revenue and debit cash/debtors. However when transactions warrant more elements / entries such transactions are considered to be multiple element transactions. Here are some examples

1. Sale of a car with two-year free service - in this case cost of such services are deferred and recognized in the periods which they actually arise.

2. Customer loyalty programs for instance a retail chain may give a credit for each $1000 a customer spends & one credit equals one dollar. Consumers can use these credits to purchase items from the retail shop once such points reach 100.
answered Apr 11, 2013 by anonymous