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Notes On Banking Law
Notes On Banking Law
illustrative problem
AUGUST 1, 2028 - NO ENTRY
SEPT. 30,2028
Contract asset/ AR 80,000
Sales 80,000
#
COGS 65,000
Inventory 65,000
SEPT. 30,2028
Cash 80,000
Contract Liability/ def rev. 80,000
#
Sept. 8,2028
Cash 100,000
Accounts receivable 100,000
5,800,000
30,000
= 193
ANSWER: 1 ANSWER: 2
VARIABLE CONSIDERATION
Occurs when part of the Contract Price depends on the OUTCOME OF A FUTURE EVENT
THE ENTITY SHALL ESTIMATE THE AMOUNT OF VARIABLE CONSIDERATION
EXISTENCE OF SIGNIFICANT
FINANCING COMPONENT
the entity should consider the time value of money
the vaule of money few years ago is not the same few years ago,
and the value of money today is not the same few years from now
SALES 300,000
COGS (200,000)
GP 100,000
CONSIDERATION PAYABLE
TO A CUSTOMER
SELLER BUYER
also a SUPPLIER
= NO PROBLEM
RELATIVE FV/
TRANSACTION ALLOCATE
STAND ALONE SP
PRICE
const
100 m
130 M 36, 585,366
Main 21 M 25,609,756
Operate 31M 37, 804,878
82 M 100 M
100 m
130 M 34, 722, 222
Main Main 21,000,000
21 M 24, 305, 556
Operate Operate 49,000,000
35. 4M 40,972,222
100 M
86.4 M 100 M
SATISFACTION SATISFACTION
OVER THE PERIOD OF TIME AT A POINT IN TIME
obligation DOES NOT END after After delivering the good or rendering
rending of service the service , the entity will NO
LONGER HAVE OBLIGATION
1482 * 24 month
STEP 5 : Recognize Revenue when each Performance
Obligation is Satisfied