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    Class 1 (27.11.21)

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    Kaali CA
    The document discusses a scenario where ABC Limited sold a motor bike and three tuning services to a customer in a single contract for Rs 570,400. The bike was transferred to the customer but the tuning services will be provided each year. To recognize revenue for this transaction, the 5-step model under IFRS 15 should be applied: 1) identify the contract with customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate price to performance obligations, 5) recognize revenue when/as obligations are satisfied.

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    Class 1 (27.11.21)

    Uploaded by

    Kaali CA
    7 views4 pages
    The document discusses a scenario where ABC Limited sold a motor bike and three tuning services to a customer in a single contract for Rs 570,400. The bike was transferred to the customer but the tuning services will be provided each year. To recognize revenue for this transaction, the 5-step model under IFRS 15 should be applied: 1) identify the contract with customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate price to performance obligations, 5) recognize revenue when/as obligations are satisfied.

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    The document discusses a scenario where ABC Limited sold a motor bike and three tuning services to a customer in a single contract for Rs 570,400. The bike was transferred to the customer but the tuning services will be provided each year. To recognize revenue for this transaction, the 5-step model under IFRS 15 should be applied: 1) identify the contract with customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate price to performance obligations, 5) recognize revenue when/as obligations are satisfied.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    7 views4 pages

    Class 1 (27.11.21)

    Uploaded by

    Kaali CA
    The document discusses a scenario where ABC Limited sold a motor bike and three tuning services to a customer in a single contract for Rs 570,400. The bike was transferred to the customer but the tuning services will be provided each year. To recognize revenue for this transaction, the 5-step model under IFRS 15 should be applied: 1) identify the contract with customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate price to performance obligations, 5) recognize revenue when/as obligations are satisfied.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
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    Class 1

    Saturday, November 27, 2021 12:37 PM

    IFRS 15 - Revenue FRom ContRaCtS wIth CuStomeRS

    Question 1
    ABC Limited sold a motor bike to a customer. The fair value of the bike was Rs 500,000. The bike was
    sold along with three tuning services which generally has a fair value of Rs 40,000 each. Cost of
    inventory (bike) is 390,000 whereas each tuning service cost the company Rs 28,000. The company
    charged a lump sum amount of Rs 570,400. The cash was collected at the inception of the contract
    and accordingly the bike was physically transferred to the customer control. The tuning services,
    however, will be surrendered at the end of each year.

    Required
    Apply the five-step model to the scenario and recognize revenue accordingly.

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