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Accounting & Bookkeeping & Small Business Forum
Accounting, Bookkeeping, Marketing, and Small Business Resource
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tsoper5
Joined: 21 Apr 2008
Posts: 1
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| Posted: Mon Apr 21, 2008 2:15 pm Post subject: Return of Merchandise or Inventory Buyback |
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| We sold merchandise to a distributor, received payment and now months later the distributor wants to return excess inventory. I would prefer to buy the inventory back as a purchase rather than offset my sales by a return. I can't find in FASB where this is not permissable, but does anyone know and have a reference? Thanks! |
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Ken
Joined: 17 Aug 2005
Posts: 166
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| Posted: Wed Jul 23, 2008 5:46 pm Post subject: |
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| There should be no problem with a Buy Back. |
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RobJ
Joined: 11 Jun 2008
Posts: 182
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| Posted: Wed Jul 23, 2008 6:01 pm Post subject: Re: Return of Merchandise or Inventory Buyback |
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tsoper5 wrote: We sold merchandise to a distributor, received payment and now months later the distributor wants to return excess inventory. I would prefer to buy the inventory back as a purchase rather than offset my sales by a return. I can't find in FASB where this is not permissable, but does anyone know and have a reference?
I can't provide a reference, but if your financial statements are relied upon by a third party (such as a bank for credit), you're inflating your sales by not recording it as a return and giving a rosier picture of your business than is true. I'm not the ethics police, I'm just providing my opinion. |
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