AB manufactures machines. AB enters into a contract with a customer to sell a machine. Control of the machine passes to the customer on delivery of the machine to the customer's premises on 1 January 20X2. Under the terms of the contract, the customer must pay $200,000 for the machine on 31 December 20X3. The interest rate that would be reflected in a separate financing transaction between AB and the customer on 1 January 20X2 is 6%. What is the correct accounting treatment in AB's statement of profit or loss for the year ended 31 December 20X2 in relation to this contract?

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The accounting treatment for the machine sale contract in ABs statement of profit or loss for the ye... View the full answer