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INSTALLMENT SALES - Coggle Diagram
INSTALLMENT SALES
When to Recognize Revenue if
at a point in time
over time
Over Time
An entity transfers control of a good or service over time
At a Point in Time
There is Transfer and Control of the Asset
Determine at a Contract Inception
Is the Obligation Satisfied?
Yes
Is the Collection Probable?
No
All payments including interest are treated as deposit liability
Subject to reassessment
There may be a probability of collection in the subsequent period
Do not recognize revenue YET
When to Recognize Revenue?
The Contract is Terminated
Deposit is Non Refundable
The Entity has no remaining obligation
Collected All or Substantially All
It is not Refundable
The Probability of Collection is already ensured
Yes
Recognize Revenue based on satisfied performance obligation
No
Do not recognize Revenue
Payment made by Customer be treated as Contract Liability