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Dealers deposit


Company has accepted deposits from it's dealer. Period for dealership agreement is 3 years. Agreement can be canceled by any of party after giving notice of 30 days. Whether these deposits are required to fair valued using effective interest rate (considering the facts that deposits are repayable on demand). If no , whether we can continue to show these deposits as non current liability since there is no intention on part of either company/ dealer to terminate agreement.

asked May 25, 2016 in IFRS 9 - Financial Instruments by Pooja

1 Answer

0 votes

I think yes. Its a financial liability under IAS 39 and needs to be measured at fair value initially and at armotised cost subsequently.

Check some past questions:

Security / Refundable deposits on building rent/lease agreements

How to treat an interest free loan under IFRS?

 

answered May 26, 2016 by Tina Level 5 Member (11,560 points)


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