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Kim Smith.
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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Baltimore co dec 13
The revenue generated from corporate website development should be recognised over time if the website is bespoke and does not have an alternative use i.e. cannot be repurposed for another client.
ma’am won’t the revenue from initial development of website be recognised at a point in time? I understand that maintenance should be spread over time. But as far as development is concerned, it only happens once i.e. at the start of contract with customer. Once the website is ready it only needs to be maintained over time, for which mizzen co is correctly spreading the revenue.
If you are quoting from an answer in a kit it has been oversimplified, this is what I have from another source:
“The revenue generated from website development and maintenance should be split into two components. Revenue for website development should be recognised at a point in time once the website has been provided to the customer, but the revenue for maintenance should be recognised over the contract period.”
yes the one from your source makes perfect sense! what’s your source ma’am?
The originally published answer (just browsed ACCA P7 Baltimore) – but you can’t rely on them being technically correct, especially wrt IFRS.