Deferred payment beyond normal credit terms

Learning objectives

• Calculate the cash price equivalent of a deferred payment.L3
• Record the acquisition and the interest expense over the period of credit.L3, L4

Normative references

• IAS 16 §23Payment deferred beyond normal credit terms: cost = cash price equivalent; the difference is recognised as interest over the period of credit unless it is capitalised in accordance with IAS 23.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

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