Problem
Determine the treatment of each of the following items and quote the relevant passage of AASB 118 Revenue:
• Buena Casa Ltd is an Australian importer of furniture. A customer has placed an order for leather furniture with a sales value of $50,000 that will be shipped directly to the customer from an overseas supplier. The furniture is shipped unassembled and requires a significant amount of assembly by a local agent of the exporter and represents a significant cost of purchase. The shipping terms indicate that once the furniture has been assembled, it becomes the responsibility of the customer. The shipment arrived on 30 June 2016 and was delivered to the customer on the same day. The exporter's local agent arranged assembly for the next day i.e. 1 July 2016. The Sales Manager has asked the Financial Accountant to include the sale in the financial statements for the year ended 30 June 2016. How should the Financial Accountant reply?