Maintenance contract - 3 years £200k per year.
accounting treatment - prepaid each instalment (annual payments up front)and release strightline each month - matching principle.
Q) If there was a condition in the contract where if you paid upfront for 3 years you would receive a 10% discount, how does this impact the accounting treatment. Or would you simply just prepay £540k and release over 36 mths. Are there any accounting standards I should be looking into/thinking of ?
many thanks
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FRS102 re Financial Instruments might be worth a read, it mentions sales with deferred payment but does not mention purchases with advanced payments, as far as I could spot ( chapter 11.13)
This is not something I have really looked at, and could well be irrelevant, but there are strange things within FRS102 beyond my experience.
https://www.frc.org.uk/getattachment/69f7d814-c806-4ccc-b451-aba50d6e8de...(March-2018).pdf