I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 

 EXAM FOCUS POINT 

The FFA/FA examining team have written a technical article entitled ‘Discounts’, last updated in 

November 2016. This article explains how prompt payment discounts are accounted for in 

accordance with IFRS 15. The article will help reinforce your knowledge of accounting for discounts.  

 IMPORTANT 

If a customer is expected to take advantage of a cash (or settlement) discount allowed, the discount is 

deducted from the full invoiced sales amount when recognising revenue for the sale. If the customer 

subsequently does not take up the discount, it is recorded in revenue. 

Conversely, if a customer is not expected to take advantage of a cash (or settlement) discount allowed, 

the full invoiced sales amount is recognised as revenue for the sale. If the customer subsequently does 

take up the discount, revenue is reduced by the discount amount. 

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CHAPTER 14  

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  CONTROL ACCOUNTS