IAS 18 Extended Payments terms
Date recorded:
Issue
IFRIC members considered the accounting for extended payment terms, such as six-month’s interest-free credit.
Decision not to add
July 2004
Reason
IFRIC members were of the opinion that the accounting treatment was clear, and declined to add the issue to its agenda. IFRIC members agreed that IAS 39 Financial Instruments: Recognition and Measurement applies to the receivable in such circumstances, and that the effect of the time value of money should be reflected when this is material (IAS 39 paragraphs AG69-AG82). IFRIC members noted that the wording of IAS 18 Revenue paragraph 11 lacked clarity and needed to be improved.
IFRIC reference: IAS 18
