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Hi, i would like to know if there are any videos related to IFRS 15? i couldnt find any…
I have a doubt
in the 3rd step of IFRS 15, ie Determining the transaction price, we have to check if there is any consideration payable to a customer.
It says if the consideration is paid to a customer in exchnage for a distinct good or service, then it is essentially a purhcase transaction.
But if it is not in exchange for a distinct good or service, then treated as a reduction in transaction price.What i dont understand here is the meaning of “distinct good/service”
Can you please explain with examples.When the payment is made, what initiated that payment requirement? What, if anything, was received in exchange? Is it possible to link goods or services direct to the payment?
If nothing was received in exchange (neither any goods nor services) then it should be classed as a reduction in the transaction value … but if goods or services WERE received in exchange for the payment, then that would be classed as a purchase of those goods or services
Is that better?
Can you please help me with this question..
Golden Gate enters into a contract with a major chain of retail stores. The Customer commits to buy at least $20mn of products over the next 12 months. the terms of the contract require Golden Gate to make a payment of $1mn to compensate the customer for changes that it will need to make it its retail stores to accommodate the products.
BY 31 dec 2001, Golden has transferred products with a sales value of $4mn to the customer.
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So here, Golden is paying a sum of 1mn as a compensation. So Golden is not actually receving any good/service, therefore should be treated as a reduction in transaction price. Is this how i am supposed to think?Can you please tell why IASB has issued the new standard, IFRS 15?
IFRS 15 is actually replacing IAS 11 and IAS 18 right?
So is there like a list of weaknesses in those standards? If so, can you please highlight them?Yes – the net effect is that we have an undertaking to deliver $19 million in the 12 month period. In that way the $1 million compensation is spread over the period
I had already started answering the first question so didn’t see the supplementary one arrive!
You’re correct in terms of saying that IFRS 15 replaces IAS 11 and IAS 18.
I’m not aware of any list of weaknesses or deficiencies within those previous IASs except that they didn’t adequately deal with contracts where providers entered into continuing obligations to service the product that they had provided
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