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Module 10 Accounting For Build-Operate-Transfer
Module 10 Accounting For Build-Operate-Transfer
Gino
BSMA 3102
Module 10 Accounting for Build-Operate-Transfer
9. The operator under a BOT contract receives a backhoe from the grantor. Control
over the backhoe is transferred to the operator. The operator shall treat the backhoe
as part of the transaction price that will be recognized as revenue.
11. If the operator identifies two performance obligations in the contract, what would be
these two obligations?
Performance obligation 1 Performance obligation 2
a. Maintenance Operation
b. Construction Maintenance
c. Construction Maintenance and operation
d. Operation Resurfacing
12. According to IFRIC 12, the nature of the operator’s obligation in the BOT
contract is
a. constructor c. service provider
b. manufacturer d. operator
13. If the operator identifies two performance obligations in the contract, which of the
following statements is true?
a. The operator allocates the cash collections to the two performance obligations,
based on their relative stand-alone selling prices.
b. The operator allocates the present value of the cash collections to the two
performance obligations, based on their relative stand-alone selling prices.
c. The operator allocates the present value of the cash collections to a single
performance obligation.
d. None of these
14. How should the operator recognize revenue from the BOT contract?
Performance obligation 1 Performance obligation 2
th
a. upon completion in the 5 year as services are provided
b. as collections are received as collections are received
c. based on progress billings based on measure of progress
d. based on measure of progress as services are provided
15. By the end of the 10th year of the contract, the operator would have recognized
total revenue equal to (assume a discount rate of 10%)
a. 100M x 10 years
b. 100M x PV ordinary annuity @ 10%, n=7
c. 100M x PV of 1 @ 10%, (n=3, n=4, n=5, n=6, n=7, n=8, n=9)
d. 100M x PV of 1 @ 10%, (n=4, n=5, n=6, n=7, n=8, n=9, n=10)
Answers:
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
6. TRUE
7. FALSE
8. TRUE
9. TRUE
10. C
11. B
12. C
13. A
14. A
15. D