Telecommunications
Handset Subsidy Cost
Recording the cost of selling a handset below cost to attract a customer to a 24-month contract.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cost of Handset (Full Cost) | Expense (+) | 300.00 | - |
| Handset Revenue (Customer Pays) | Revenue (+) | - | 100.00 |
| Handset Subsidy Expense (Loss on Sale) | Expense (+) | - | - |
| Cash / Contract Asset | Asset (+) | 100.00 | - |
| Handset Inventory | Asset (-) | - | 300.00 |
💡 Accountant's Note
The handset loss (JOD 200) is offset by the higher-margin service plan revenue over 24 months. Under IFRS 15 bundle accounting, the handset is allocated its standalone value, reducing the subsidy loss.
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