I've got a question about volume discounts. Should volume discounts be accounted for as a reduction of revenue, or should it be considered sales discounts and rebates?
submitted by Jolene Chen

alagarran

Volume discounts should generally be recognized as a reduction of revenue.
It has to meet certain criteria. Check out IFRS 15 or ASC 606.
Volume discounts can be considered part of the transaction price adjustment rather than sales discounts or rebates.

Buhawi_Woo

Typically, volume discounts are accounted for as a reduction of revenue because they relate directly to the sale. They are not classified as sales discounts or rebates unless they are offered after the sale or are intended to incentivize future purchases.

Frumay20

From my humble understanding, volume discounts are usually treated as a reduction of revenue since they depend on the quantity sold.

They aren't considered sales discounts or rebates. =)

Freuderick

I think volume discounts should be recorded as a reduction of revenue because they lower the total amount earned from a sale. You shouldn't count them as a reduction if they're offered after the transaction is over though. In that case they'd be seen as rebates or discounts.

nooope

Volume discounts are usually considered a way to lower the revenue because the seller gives a discount for buying more, so it's not really a rebate or a separate discount, but just a reduction in the sale price.

fwhy999

Volume discounts reduce the revenue figure directly, rather than being treated as a separate sales discount or rebate. It works this way because they are part of the price agreed upon at the time of sale.