Vehicles include the sale of new vehicles, machinery and engines, as well as the sale of used vehicles, machinery, trailers, superstructures and special vehicles. A standard contractual guarantee is included in the sale, read more on note 21 Other provisions relating to the guarantee of the product. The customer can pay the vehicle at the point of sale or defer payment by taking agreements such as installment loans and finance leases. Goods delivered to a destination point are added to the seller`s inventory until the buyer receives and accepts the goods. The value of the inventory therefore remains a current asset; it does not go into the profit and loss account as the cost of the products and revenue sold. Turnover is usually recorded at the Point of Sale, as time and amount are known with certainty. One exception to this rule is long-term construction projects. Measures for long-term construction projects are difficult, as many things are planned and estimated. Two basic methods of accounting for long-term construction contracts are recognized by accounting: percentage of completion and completed contractual methods. The seller of the merchandise displays the merchandise or assets on its balance sheet, since it retains all ownership of the goods. The buyer keeps the goods only as a pawn. Accounting for a product financing agreement is a credit agreement and not a sales transaction. Thus, the «seller» continues to declare his property on the asset «sold» as well as a liability for his obligation to repurchase.
There are two variations in the accounting of the obligation to repurchase: 2) As Chad said, instead of dr. cash and liability, the seller credits their inventory and signs a sale. At the same time, the seller avoids accounting for liability and artificially increases his net income (provided the sale price is higher than the cost of the item). This could also be used to defer income tax payable by posting a net loss per sale at a loss. The seller agrees to buy back the item he has just sold or an essentially identical unit. By: Sale and buyout contract in A Dictionary of Accounting » Also known as a buyout and product financing contract, this type of transaction takes place between two parties. The first part «sells» its inventory in the second part, with the express promise to repurchase the inventory at a predetermined price in time or on a future date. The sale with a repurchase agreement is a transaction where the seller of the commodity enters into a subsequent repurchase agreement at an agreed price at the time of the sale of the goods. This is another form of loan in which the loan is given indirectly by the purchase of the shares or the seller`s guarantee. As a general rule, the repurchase price is higher than the selling price called interest rate. At transtutors.com, our excellent and experienced tutors offer accounting and homework assistance tasks at very low prices.
Residual value commitments amounted to SEK 1,118 million (1,766) and represented revenue transactions with residual value commitments (buybacks and tradebacks) that are independent of revenue and were therefore not accounted for as assets on the balance sheet. The amount corresponds to gross risk and has not been reduced from the estimated net selling price of the products used as collateral.