Summary of Statement No. 49
Summary of Statement No. 49
Accounting for Product Financing Arrangements (Issued 6/81)
Summary
This Statement specifies criteria for determining when an
arrangement involving the sale of inventory is in substance a
financing arrangement. A product financing arrangement is a
transaction in which an enterprise sells and agrees to repurchase
inventory with the repurchase price equal to the original sale
price plus carrying and financing costs, or other similar
transactions. This Statement requires that a product financing
arrangement be accounted for as a borrowing rather than as a
sale.