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Business of consignment Sales
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[QUOTE="Yakub02, post: 308792, member: 94426"] [B]Business of Consignment sales[/B] An entity might deliver a product to another party (such as a dealer or a distributor) for sale to end customers under a consignment arrangement. Indicators that an arrangement is a consignment arrangement include (but are not limited to) the following: the product is controlled by the entity until a specified event occurs, such as the sale of the product to a customer of the dealer or until a specified period expires; the entity is able to require the return of the product or transfer the product to a third party (such as another dealer); and the dealer does not have an unconditional obligation to pay for the product (although it might be required to pay a deposit). These arrangements are common in the car industry where manufacturers deliver cars to showrooms on consignment. Control of a product held in a consignment arrangement has not passed. Revenue is not recognised upon delivery of a product held on consignment but at a later point in time (depending on terms in the contract). Elements of cost The cost of an item of property, plant and machinery consists of: its purchase price after any trade discount has been deducted, plus any import taxes or non-refundable sales tax; plus [/QUOTE]
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