In September 2022, Terra Ltd. has decided to increase the sale discounts to clients who purchase a particular vegan product. This product is supplied by the company Aliser Ltd. In August 2022, Aliser Ltd. was publicly accused of using non-vegan cleaning products. Last year, the sales of this product represented 20% of total sales. With the increase in the discounts, Terra Ltd. hoped to sell out all the remaining products by 30 June 2023. 

Required: 

a. Critically evaluate the accounting treatment under IFRS 15/AASB 15 concerning the sale discounts, including indicative journal entries and required disclosures. 

b. Identify and examine the impacts of this public accusation on financial and non-financial users. c. As an accountant, offer recommendations to our society concerning the accounting treatment (part a) and the impacts (part b).

Answer rating: 100% (QA)

a IFRS 15 pertains to revenue recognition where th... View the full answer