Does anyone have any experience accounting for transactions in which Company A sells parts to Company B and then repurchases some of the parts after value has been added to sell to Company C? At the time of the initial sale to Company B, there is no way to determine how many of the parts Company A will repurchase from Company B. I have looked at EITF 04-13, but that does not appear to be applicable. I don't think it is appropriate to recognize the entire amount of revenue in the second transaction when Company A sells to Company C because we would be double counting revenue. We also don't want to defer revenue recognition on the initial sale because we have no way of know how many parts we will buy back until we get orders. Any guidance would be greatly appreciated!
- posted
16 years ago