Note receivable Doyle Games is a local game company that needed some new computers and virtual reality
Question:
Note receivable Doyle Games is a local game company that needed some new computers and virtual reality studio equipment. In January, All Starr entered into an agreement with Doyle Games, selling it $80,000 in equipment but agreeing not to collect payment for three years. Doyle Games is expecting a grant from the government that will be paid in three years' time. All Starr would normally charge interest of 8%, but has agreed to waive the interest for this contract. The $80,000 balance owing from Doyle has been recorded as a note receivable. All Starr recorded a gain on the sale of equipment of $25,000.
For that transaction i have to recognize under both ASPE and IFRS , initial recognition for both is cost or fair value. If im trying to find the fair value, woudl it be 80,000/1.08 or do i have to use the PV formula?