Uploaded by Rose Anne Balana

AFAR CONSIGNMENT RA

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CONSIGNMENT SALES
CONSIGNMENT SALES
transfers the
POSSESSION
not the
OWNERSHIP
Arrangement between
• Entity that delivers goods
CONSIGNOR
Inventory
CONSIGNEE
CONSIGNED GOODS
• Party who undertakes to sell the goods
to END CUSTOMERS on behalf of
the consignor.
Memo Entries
Form part of the
Cost of CONSIGNED GOODS
Freight and other incidental
costs
If the CONSIGNEE shoulders these costs
Treated as
Treated as
EXPENSE
Receivable from
CONSIGNOR
Reimbursable
Repair Costs
Not Reimbursable
EXPENSE
Based on SALES
EXPENSE
In case of
RECEIVABLE
• When the related goods
are sold to end customers,
derecognize receivable
then recognize CE
INCOME
COMMISSION
• Deducted from the amounts remitted
to the CONSIGNOR
Based on MARKUP
Advanced Commission
• Not Cost of Inventory
COMMISSION EXPENSE
GROSS AMOUNT
REVENUE RECOGNITION
COMMISSION / FEE
• Recognizes revenue ONLY when CONSIGNEE sells the
CONSIGNED GOODS to the END CUSTOMERS
PRINCIPAL
• Controls the goods or services BEFORE the good or
service is transferred to the customer.
AGENT
• Arranges the provision of goods or services by another
company
By: RABALANA
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