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Revenue ifrs 15 sikta

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Revenue ifrs 15 sikta

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by Stephen Widberg.
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  • November 22, 2022 at 4:53 am #672012
    Frooti
    Participant
    • Topics: 92
    • Replies: 83
    • ☆☆

    The total contract price is $3 million for both licensing the software and the
    monthly updates. Sitka Co licenses the software on a stand?alone basis for between $1
    million and $2 million over a four?year period and regularly sells the monthly updates
    separately for $2?5 million over the same period.

    (a) (i) Discuss whether the four?year software contract with Cent Co is a single
    performance obligation in accordance with IFRS 15 Revenue from Contracts
    with Customers including how the revenue from the contract would be
    accounted for in Sitka Co’s financial statements for the year ended
    31 December 20X7. Your answer should include whether the revenue should
    be recognised at a point in time or over time.

    doubt- If I say software & its update needs to be classified as separate performance obligations then how much shall be revenue for both of them recorded?

    November 22, 2022 at 2:10 pm #672067
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3396
    • ☆☆☆☆☆

    If that is your view, say based on standalone prices.

    As always please refer to my recorded debrief in our revision kit.

    If you think a calculation is appropriate, make an assumption.

    As you know they want to see explanations. Calculations are much less important.

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