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Revenue Example 7 - ACCA Financial Reporting (FR)

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11 Comments

  1. JaneJLocane
    Thanks!
  2. Richard
    Thanks!
  3. Richard
    Looks very interesting
  4. jerfkeli
    Thank you
  5. maheshr1
    This method is from IFRS 11 and not IFRS 15. For the exam periods up to and including June 2022, the FR examining team will award credit for either approach. The importance of showing your workings in Section C (Constructed Response questions) cannot be over emphasised as the marker will be able to award credit based on the workings available.
    From September 2022 onwards, credit will only be awarded for the correct IFRS 15 approach.
    https://www.accaglobal.com/gb/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/assets-liabilities.html
  6. Ade
    It seems that the method for computing contract asset and cost charged to the profit and loss has changed based on fr technical article. Contract asset is revenue to date less billing to date and cost charged as incurred . Please could you comment on this please.
  7. alawi sayed
    Hi ,

    Why the inventory of $ 8000 was not shown in SFB as this inventory is unused,

    Thanks,
  8. Andrzej
    The "underlying" asset value is 64,800=52,000+12,800. But once you invoice even part of it, you are, as it were transforming it into other asset i.e receivables. Again, if part of receivables is actually paid, we have yet another transformation of assets AR => cash. However, please note that at any point in time the whole asset family is worth 64,800. Recording subsequent transactions in a manner explained by Chris, we insure that original (underlying) asset value is not partly doubled at any time.
    52,000+12,800-(45,000+45,000)-(26,500+26,500) = 52,000+12,800
  9. PRAVEEN
    In SFP while calculating Contract asset why didnt we take cost to date as 55200 (52000+(40%of 8000)). It says to be used in future years but on contrary it doesn't say it is not used in first year?
  10. Nibah
    it saying future years and not present year, therefore its not relating to the first year.
  11. Mary
    why didnt we use the 18500 receivable value in computing the value of the asset? why have we used 45000?

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