(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009Deferred payment23.5 When the inflow of cash or cash equivalents is deferred, and the arrangementconstitutes in effect a financing transaction, the fair value of the consideration isthe present value of all future receipts determined using an imputed rate ofinterest. A financing transaction arises when, for example, an entity providesinterest-free credit to the buyer or accepts a note receivable bearing abelow-market interest rate from the buyer as consideration for the sale of goods.The imputed rate of interest is the more clearly determinable of either:(a)(b)the prevailing rate for a similar instrument of an issuer with a similarcredit rating, ora rate of interest that discounts the nominal amount of the instrument tothe current cash sales price of the goods or services.An entity shall recognise the difference between the present value of all futurereceipts and the nominal amount of the consideration as interest revenue inaccordance with paragraphs 23.28 and 23.29 and Section 11.Exchanges of goods or services23.6 An entity shall not recognise revenue:(a)(b)when goods or services are exchanged for goods or services that are of asimilar nature and value, orwhen goods or services are exchanged for dissimilar goods or services butthe transaction lacks commercial substance.23.7 An entity shall recognise revenue when goods are sold or services are exchangedfor dissimilar goods or services in a transaction that has commercial substance.In that case, the entity shall measure the transaction at:(a)(b)(c)the fair value of the goods or services received adjusted by the amount ofany cash or cash equivalents transferred;if the amount under (a) cannot be measured reliably, then at the fair valueof the goods or services given up adjusted by the amount of any cash orcash equivalents transferred; orif the fair value of neither the asset received nor the asset given up can bemeasured reliably, then at the carrying amount of the asset given upadjusted by the amount of any cash or cash equivalents transferred.Identification of the revenue transaction23.8 An entity usually applies the revenue recognition criteria in this sectionseparately to each transaction. However, an entity applies the recognition criteriato the separately identifiable components of a single transaction when necessaryto reflect the substance of the transaction. For example, an entity applies therecognition criteria to the separately identifiable components of a singletransaction when the selling price of a product includes an identifiable amountfor subsequent servicing. Conversely, an entity applies the recognition criteria to136 © IASCF