Where deferred terms include a significant financing component, the amounts are discounted, and an expected credit loss allowance is recognised for receivables. External confirmations and subsequent receipts testing are the key audit procedures for these balances.
Source: TFRS 9, TFRS 15
Related terms
Expected credit lossCredit losses on financial assets that are estimated, taking forward-looking information into account, and provided for in advance.RediscountDiscounting receivables and payables represented by notes with maturities to their present value by deducting the interest element accrued up to the valuation date.External confirmationThe auditor obtaining written confirmation of a balance or information directly from a third party (bank, customer, supplier, lawyer).Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: November 8, 2026 · This definition is for general information only.