The company has equipment which will be used in providing their service (communication equipment). this equipment will be sold to the costomer or will be given to the costumer temporarly during the service period which the company provides. After the costomer ceased agreement with the company, the equpment is returned to the company and then can be used again. The asset’s useful life is more than one year. By your opinion, how can be treated such equipments according to IFRS, as Inventory, PPE or some other assets (for-sale)?
And if it’s inventory, at the returning the asset, should we reduce COGS for this period, or it’s treated as income. thanks a lot