Accounting for Free Sample Distribution | Promotional Expenditure Under Ind AS Framework

This case study examines the accounting treatment for the distribution of free samples by a company under the Indian Accounting Standards (Ind AS) framework. It focuses on how the expenditure incurred for distributing the free samples should be recognized in the financial statements, in line with the provisions of Ind AS 38 and Ind AS 115. The analysis delves into whether such marketing expenditures should be treated as an expense or capitalized, considering the nature of the transaction and the absence of revenue generation or performance obligations.

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