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land sale contract goes unconditional

land sale contract goes unconditional

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Hi - if a land sale contract goes unconditional before year end but the notice period and therefore the payment date and payment received date goes post year end, do you recognise the gain from an accounting perpective in year 1 or 2? which IFRS would it relate to - IFRS 15?

Many thanks 

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By Accountant A
20th Feb 2020 11:47

What "notice period" is that?

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By qwertyqwerty05
20th Feb 2020 12:02

A period of time the purchaser has to arrange the final payment, say for example 25 days. This notice period spans the year end period.

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By johnt27
20th Feb 2020 12:10

Depends on how you classified the land in the first place - PPE, held for sale, stock/inventory

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By Accountant A
20th Feb 2020 15:43

Would have thought if you've legally acquired but just not paid then it's your asset.

Last time I bought a house, I was advised to insure insurance was in place at exchange because that was when I had bought the property. That's obviously residential but ....

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By Martin Schneider
20th Feb 2020 17:03

For tax purposes, it's when the contract becomes unconditional. I would assume (but couldn't prove...) that this would be reflected in the accounting treatment.

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