Sale or return - Which FRS?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I need to find out which FRS deals with Sale or Return. I have been told that it is FRS 5 but I can't see how. Can someone please explain?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Sale or return - Which FRS?

    Hello<BR><BR>Why don;t you try the Accounting Standards Board? the web address is:<BR><BR>http://www.asb.org.uk<BR><BR>Claire
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Sale or return - Which FRS?

    FRS 5 deals with the substance of transactions.<BR>Your problem with sale or return stock is dealt with unjder consignment stock and revolves around who actually owns the stock. If the potential buyer can return the stock without penalty at any time then it belongs to the vendor, as stock held by a 3rd. party. If right of return is limited then it probably belongs to the purchaser (debit purcharese, credit creditors). It is possible for the buyer and seller to use different treatments. <BR>A typical situation is a car main agent, they don't actually buy the stock until it's sold but they can't return it unless the manufacurer says so, it is then treated as belonging to the dealer.<BR>Lots of grey areas, good luck.

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