If the company sell the stock to distributor and distributor is the principal. The money sits in its account until another subsequent court order instructs the entity to have both the property and the rent collected to be returned. According to the law, the net amount of revenues from my second client less certain expenses must be returned to my first client. (iii) furthermore there will be 2 or 3 payments to a seller for one item sold. (ii) At the moment of credit booking: Accounts payable 80 (C), Deferred revenue 20 (C), suspence account 100 (D). Any advise on those points? Company B does not any have any contract or agreement with Company A’s customer. Best! However, it matters a lot due to other financial issues and indicators, such as: If you experienced the similar situation and you’d like to share it with others, please do so in the comment right below this article. report “Top 7 IFRS Mistakes” Regarding principal & agent, I am wondering: at what extend the same principles can be applied to leasing companies that lease their own assets to clients. As, I am working as an accountant and this is my first job and I am an ACCA. Bank covenants dependent on the revenues from sales might be affected; Bonuses to management calculated based on the sales revenue might be affected; and you can go on. So, as per this concept it is an Agent, AM I RIGHT? has information you must know before you submit your application, and explains how to fill out the forms and gather your supporting documents. Dear Silvia So, in this situation company sells hotel and earns income, as the proceeds are higher of carrying value. The AVID System provides educators with training and methodologies that develop students’ critical thinking, literacy, and math skills across all content areas, preparing all students for college and other postsecondary opportunities. Company B was able to persuade the tax authority that its revenue was ONLY the commission but the tax authority request that the gross invoiced amount should be presented as revenue with the associated costs (suppliers’ invoices) in the financial statements shared a post on Instagram: “#anchorchart for teaching students how to write a paragraph. Could you please help me with this example? The path may seem unclear. Can they rent an apartment without utilities and pay for utilities from other supplier? Because A controls the right to the services, A concludes that it is acting as the principal. I’m curious about how teachers support their students. Should convenience /understanding reached with the tax authority by Company B override the requirement of IFRS 15 on principal vs agent relationship by presenting the total invoice value as gross revenue instead of its commission as revenue? Is our transaction consider as an Agent? Please explain, I am poor in this field. – payment to a tour operator: Debit Liability to tour operators 80, Credit Cash/bank account 80. Your future is worth it. Demand for honey is going to be bad. You are awesome and great. In other words, you need to determine the point at which your obligation to provide a service (“performance obligation”) is satisfied. Here, it’s difficult to say who is responsible for the goods sold, as there is no guarantee and nothing said about the post-delivery service, but we can assume that GreatGear would not take any responsibility (of course, in reality, it’s necessary to examine it). And we need not record the 100 as our revenue would only be 10 from the commission. Easy #teacherhack for teaching writing…” • Follow their account to see 1,540 posts. You are worth it. Basically, you are an agent if your responsibility is limited to arranging or mediating the provision of goods or services for another party. "As a freshman at Mason, I had difficulties being on my own for the first time. Placements. Cr. Will highly appreciate if you can please provide your valuable input in this regards. Thank you. It’s quite difficult to set in the case of services, but here’s another consideration: are you sure you ask me about IFRS 9 Financial Instruments? Sometimes, one of them is met and the other one is not met – in a similar situation you should really think carefully whether significant risks and rewards of ownership, or control over goods or services was transferred or not. S. yes same impact on CIT because cost is deductible. As, I am working as an accountant and this is my first job and I am an ACCA. Thank you! In the service industry where services are provided over a period of more than 1 year and we conclude that the entity is a principal, does that mean revenue should be spread over the duration on the contract? You are awesome and great. There are 2 main selling procedures: GreatGear buys new bikes from their manufacturers. Principal knows that demand for honey is going to be enough. under licence during the term and subject to the conditions contained therein. The bikes remain in the GreatGear’s store or warehouse until they are sold. It began with the Native American tribes who celebrated annual fish runs, and continued with colonial settlers, whalers, and the modern fishing fleet. Looking forward to receiving more from you. I remember that at some companies we had a long discussion whether they act as an agent or a principal, so I can’t really respond clearly without looking at specifics and assessing these aspects. thanks for your pages.