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28/01/24 chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://aatsl.lk/images/pdf/articles/sinhala/lkas-23-(sinhal
articles/sinhala/lkas-23-(sinhala).pdf
4/2/2024
10-Mar
 Sim card and phone - can get separately
rice and curry - cannot get separatly

Ex Asking construction company to build a hospital with beds and medicle eqipments - there are only one obligation si

phone and sim card - if the phone does not work without sim we get this as only one performance obligation

The transcation price is the amount of consideration to which an entity expects to be entitiled in exchange for trasferring prom
amounts collected on behalf on of third parties are excluded

Variable considerstion (---> Probability has to be high

The exsistence of a significant finance component in the contract
Non cash consideration'
Consideration payable to customer

If the consideration promise in the contrct inclused varioble amount an entity must estimate the amount which the
Refunds

if a product is sold with a right to return it the consideration is variable. The entity must estimate the variable consideration a

If entity recognize arefund liability if it is receive consideration from a customer and expects to refund some or all of that con
A refund liability is mesured at the amount of consideration received (or receavable) for which the entity does not

Non Cash Consideration

Any non cash considerration is metiored at fair value. If an entity cannot resonably estimate the fair value of non ca
alone selling price of the goods or servises promise to the customer
here are only one obligation since supplier gave 3 theree of them as final product

performance obligation

n exchange for trasferring promised goods or services to a customer.

stimate the amount which the entity will be the entirety to exchange for satisfied the perfomance obligation. The estimated amount of v
e the variable consideration and decide whether or not to include it in the trascation price.

refund some or all of that consideration to the customer '

for which the entity does not expect to be entitled.

timate the fair value of non cash considerration then it is valued by reference to the stand
n. The estimated amount of variable consideration can only be included in the transaction price if it is high probable that a significant re
probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertaityly is resoleved
he uncertaityly is resoleved
 Q1
X Plc is contractor wchich entered in to a contract to build a bridge
splc is responsible for the overall management of the project, the project involves the provison of various goods and servises i
X PLC and it'scompititors regulary sels many of these goods and servises separately to other customers

Required
As per slfrs 15 how many perfomance obligations are available
3
Design , Side preparation , construction

Q 2

X Plc is a mobile phone company x plc sells mobile phones. Contracts under wich a customer receives a an a contract wchich h
specified number of textes a specified number of calls minitues and specified data volum. Usage in excess of the specified am
routinely available from other suppliers.

x plc sells the handset and network connection servise separatly snd these are routinly available from other suppliers.

as per slfrs 15 how many PO are available.

3 - mobile phone / hanset / network

Q2

X Plc is a mobile phone company x plc sells mobile phones. Contracts under wich a customer receives a an a contract wchich h
specified number of textes a specified number of calls minitues and specified data volum. Usage in excess of the specified am
routinely available from other suppliers.

x plc sells the handset and network connection servise separatly snd these are routinly available from other suppliers.

as per slfrs 15 how many PO are available.

Q4
on december 2021, bri provides asevice to customer for next 12 month of period.
the consideration is 12 million. Bri is entietily to an extra rs 3 million if after 12 months number of mistakes made falles below

determine the accounting tretment if bris as expeeriensed pf providing identical services in past and it highly probable that th
IF BRI HAS NO EXPERIENCE OF PROVIDING THIS SERVICE and its unsure if thr num
For 01 month
Q5

A PLC enters into 50 contacts with customers. Each contract includes the sales of one product for rs 1000. The cost to A PLC of
customers can return product within 30 days to receive afull refund
A Plc has experienced is estiamating retuns for this product. It estimate that 48 products will not be return

calculate amount to be recognize with relevent double entry

 evenue Recognition: A PLC enters into 50 contracts, each selling one product for Rs 1000. Total rev
contract = Rs 50,000. Cost of Goods Sold (COGS): The cost to A PLC of each product is Rs 400. Total co
20,000. Profit Calculation: Profit = Revenue - COGS = Rs 50,000 - Rs 20,000 = Rs 30,000. Now, since ca
on delivery, the revenue can be recognized at the time of delivery. Journal Entries: At the time of deli
This entry recognizes the revenue from the sale of the products. To record the cost of goods sold: De
20,000) This entry recognizes the cost of goods sold and reduces the inventory balance. Additionally, w
Returns Reserve (Rs 48,000) Credit: Provision for Returns (Rs 48,000) This entry sets aside the estimate
The Estimated Returns Reserve represents a contra-revenue account that reduces the total revenue.
Returns (Rs 48,000) Credit: Estimated Returns Reserve (Rs 48,000) This entry reverses the provision
entries appropriately recognizes revenue, records the cost of goods sold, and accounts for estimated r
economic reality of the transactions.

Revenue Cost Rs 50,000 - 2 * Rs 1000 = Rs 50,000 - Rs 2000 = Rs 48,000

Cost 20000
Cash Account Rs 50,000 D
Revenue Account Rs 50,000 C

Debit: COGS Account Rs 20,000

Credit: Inventory Account Rs 20,000

Q6
various goods and servises including design side preparation and construction of the bridge.

ves a an a contract wchich handset and contract to the network or a 24 month of periods. Monthly payments made by customers entitile
in excess of the specified amounts incure an extra charges. X plc sells the handset and network conection servise separately and these ar

rom other suppliers.

ves a an a contract wchich handset and contract to the network or a 24 month of periods. Monthly payments made by customers entitile
in excess of the specified amounts incure an extra charges. X plc sells the handset and network conection servise separately and these ar

rom other suppliers.

mistakes made falles below certins treshold

nd it highly probable that the number of mistakes made will fillbelow the acceptabele treshold
ICE and its unsure if thr number of mistakes made will fall below the treshold
rs 1000. The cost to A PLC of each produst is 4000. Cash is received upfront and control of the product tranfer on delivery
 oduct for Rs 1000. Total revenue from these contracts = 50 contracts * Rs 1000 per
ch product is Rs 400. Total cost of goods sold = 50 contracts * Rs 400 per product = Rs
0 = Rs 30,000. Now, since cash is received upfront and control of the product transfers
al Entries: At the time of delivery: Debit: Cash (Rs 50,000) Credit: Revenue (Rs 50,000)
rd the cost of goods sold: Debit: Cost of Goods Sold (Rs 20,000) Credit: Inventory (Rs
tory balance. Additionally, we can account for the estimated returns: Debit: Estimated
entry sets aside the estimated amount for returns as a provision on the balance sheet.
t reduces the total revenue. When the returns are actually made: Debit: Provision for
entry reverses the provision for returns as the returns are made. This set of journal
and accounts for estimated returns. It ensures that the financial statements reflect the
ality of the transactions.
ts made by customers entitiles them to send
ervise separately and these are
ts made by customers entitiles them to send
ervise separately and these are
er on delivery
 The right of use asset is measured at the commencement date as foolow,
initial measurement of liablity
lease payment pay at or before the commencement date (downpayment)
initial direct cost
Estimate the cost of dismatling and removing the asset of restoring
the site where it is located
ROU asset

Subsequent Measurement
A company can elect not to apply the leassee accounting rules,

short term leases these are leases with term of 12 months or less
leases of low value asset thease are leases of underline assets with low values
 R Inrest rate

xxx
xxx
xxx
xxx

xxx
S
y pls enters to a lease the following information is relavent

Y plc must pay 5 annual rental of ruppees 100,000 in arrears

x plc must also guaratee the residual value of the asset and the end of the lease term to be 40000
x plc incures initial direct cost of 5000

intrest rate implicit in the lease is 8%

required
what is the lease liability and ROU asset

Calculation of lease liability

Year lease paymDiscounting Factor % PV
1 100000 0.9259 92592.59
2 100000
3 100000
4 100000
5 140000

PV 100000
(1+8%)*1

Calculation of ROU

Initial mesurement of lease liability 426494

Initial direct cost 5000
Y plc enters to in to 5 years lease of a machine in 1st jan 2021

The lease liability at the commencement of the lease was 46494 and Y plc incured initial direct cost of rs 5000 when arrangi
y plc has gurantee d the residual value of te asset at the end of the lese term at 40000
estimated useful life of the asset is 5 years
and company uses cost model for subsequesnt mesurement

requied carrying value of the asset of easch reporting date

Q8

on 1st jan 2013 B plc entered into a lease contact to obtain the use of 7computers for it's staff. This would have cost 795000 to
the term of the lease agriment required and initial non refundable deposit of 32000 and then quatery rentel of 28000 paid in a

32000 112000 448000

480000
120000
30000
As per strait line method
Pre payment account dr 30000
cash cr 30000
cost of rs 5000 when arranging at the lease
his would have cost 795000 to buy outride
atery rentel of 28000 paid in arreasfor 4 years