Accounting · IFRS 15 Revenue from Contracts with Customers
Consignment inventory is an arrangement where inventory is held by one party (e.g., a dealer) but owned by another (e.g., a manufacturer). Which of the following conditions most clearly indicates that the inventory continues to be the asset of the manufacturer rather than the dealer under IFRS standards?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The dealer is responsible for day-to-day insurance costs of the stock.
- 2The manufacturer bears the risks of obsolescence and slow-moving items.✓
- 3The dealer has no right to return the inventory to the manufacturer.
- 4The dealer has the right to display the inventory in their showroom.
Correct answer
The manufacturer bears the risks of obsolescence and slow-moving items.
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