APB opinion 21

A company lends a supplier cash (interest free) for a period of four years for instance, in this case the company usually does not recognize any interest as an income because the amount will be fully paid back in four years period, no extra money will be received as interest.
APB 21 requires that credit interest should be recognized as an income for the company with the prevailing rate for such a loan, if the company purchases from the supplier products for less than its worth, even if the loan is interest free.

Waleed Tibi
Certified Accountant License 2446
Active member in Association of Syrian Certified Accountants No. 1608
Mobile: 00963-944-704454
Post Box: 6056 - Damascus - Syria
waleedtibi@gmail.com