Questions & Answers
Revenue under different Incoterms (EXW, DAP)
Question Our company sells goods to the wholesalers and other distributors. The individual contracts contain different Incoterms, such as as EXW or DAP. Does the recognition of revenue depend on the specific Incoterm? Answer Incoterms are pre-defined commercial terms of sales and they relate…
Accounting for “buy two + get one free”
Question We are a FMCG (“fast-moving consumption goods”) company and we often offer the promotional packages “buy 2 + get 1 free”. How shall we account for these offers? Can we recognize the revenue for 2 products, expenses for the same products as costs of…
Retention in construction contracts
Question We run a construction company and regularly sign contracts for the construction of buildings for our customers. The customers usually pay us at different points of time defined in the contracts (“milestones”). These milestones and payments usually reflect the progress towards completion and we…
Direct sales with no contract
Question Our company produces detergents and sells directly to supermarkets for resale based on sales orders received (small, multiple orders). We have no ‘contract’. Does IFRS 15 apply in this case since there is no contract? Answer Under IFRS 15 (paragraph 10), a contract…
