16 Section 11 – Recognition and measurement Initial recognition-measurement examples: –Goods sold (purchased) on 2-year interest free credit: Measure at current cash sale price or PV of receivable or payable Example: We sell goods for 1,000, payment due 2 years, interest-free. Cash price = 857. IRR = 8%. Journal entriesDebitCredit At time of saleReceivable857 Sales Revenue857 End of year 1Receivable 69 8% x 857 = 69 Interest Revenue 69
34 This presentation may be modified from time to time. The latest version may be downloaded from: http://www.ifrs.org/IFRS+for+SMEs/SME+Workshops.htm The accounting requirements applicable to small and medium sized entities (SMEs) are set out in the International Financial Reporting Standard (IFRS) for SMEs, which was issued by the IASB in July 2009. The IFRS Foundation, the authors, the presenters and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this PowerPoint presentation, whether such loss is caused by negligence or otherwise.