RSM220H1 Chapter Notes - Chapter 6: Fide, Consignor, Barter
Document Summary
Goods are tangible assets and there is a definite point in time when control over the goods passes to buyer. Control of asset means that the entity has access to the benefits provided to the asset while others don"t. Multiple deliverables or bundled sales contracts involving both goods and services. Consideration what the entity receives in return for the provision of goods or services. Arm"s length transactions are between unrelated parties: can assume that the value of what"s given up usually approximates the value of what is received in the transaction. Assuming transactions are at arm"s length and reciprocal: doing this allows us to better capture and measure the economics of transactions in the statements. Sales agreements normally specify what is being given up and what is being acquired. Credit risk if the entity sells on credit there is a risk that the customer will not pay.
