Economics · IFRS 15 Revenue from Contracts with Customers
Harry Co acts as an agent and sells machines on behalf of manufacturers, retaining a 10% commission. It included $20 million of gross machine sales in its draft revenue and $18 million in draft cost of sales. What adjustment is required to correctly present these transactions in the financial statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Reduce revenue by $18 million and reduce cost of sales by $18 million✓
- 2Increase revenue by $2 million and increase cost of sales by $1.8 million
- 3Increase revenue by $2 million and make no change to cost of sales
- 4Reduce revenue by $20 million and reduce cost of sales by $18 million
Correct answer
Reduce revenue by $18 million and reduce cost of sales by $18 million
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