Dave Scotland Inc. (DSI) sold inventory to a new customer, Jamali Ltd., on December 20, 2014. Jamali was given a significant discount to entice it to switch from its regular supplier. Jamali asked DSI not to ship the inventory until January 2, 2015, because Jamali's warehouse was shutting down for the holidays. DSI agreed and decided to leave the inventory on its warehouse shelves with unsold inventory. DSI felt that the shipment would be in the way if it was left on the shipping docks and that the shipping department could easily get the inventory ready for shipment on January 2.
Instructions
(a) Discuss whether the transaction should be booked as a sale on the December 31, 2014 financial statements under the earnings approach if DSI prepares financial statements in accordance with ASPE.
(b) Discuss whether the transaction should be booked as a sale on the December 31, 2014 financial statements under the earnings approach, if DSI prepares financial statements in accordance with IFRS.