Tolerance is the Foundation of Success, Profits are the Bond of Relationship: Case Study on Recognition of Interest Income in Income Discount Contract

Xue-Mei SUN, Jun-Jie WAN, Jin-Qing NIE


IN accordance with IFRS15 New Income Principle, the income should be discounted in one contract with significant financing components. The margin between the fair value of income and the nominal amount of income should be recognized as interest income. The amount is typically large in corresponding contracts with significant financing components and its businesses and policies are relatively complex. This paper will take the recognition of interest income in discounted contract within country A as example, for the purpose of understanding the business motivation from the data through studying abnormal fluctuation of deferred interest income. It also identifies varieties of risk problems in compliance with the accounting standard requirements, and provides solutions from multiple perspectives based on temporary policies.


Income Discounting, Interest Income, High-risk


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