Question
Can you please explain these two concepts, I am very confused. Please give a simple example of each also just so I can understand this
Can you please explain these two concepts, I am very confused. Please give a simple example of each also just so I can understand this better.
Significant Financing Components in Contracts
If the delivery occurs before payment, the entity discounts the promised consideration amount back to the present value. The difference between the present value and original consideration is interest revenue.
If the delivery occurs after payment, the entity determines the future value of the payment. The difference between future value and original consideration is interest expense.
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