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With reference to question Dec15Q4b(i) and June 13 Verge.
Just to confirm, there are different accounting calculations when
1) performance obligation will be satisfied over a period of time and
2) when satisfied at a point in time, right?
Why do we perform discounting in one Verge question and not in Tang question?
Thank you in advance!
Hi,
Yes, you’re correct with regards to the calculation that you mention.
In Tang we are given the present value/fair value today as $240,000 and hence no reason to do any discounting, In Verge, we are given the future value and not the value today, hence the discounting to present value to make the initial entries.
Thanks
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