IFRS-15

Q-Verge entered into a contract with a government body on 1 April 20X1 to
undertake maintenance services on a new railway line. The total revenue from
the contract is $5 million over a three-year period. The contract states that $1
million will be paid at the commencement of the contract but although
invoices will be subsequently sent at the end of each year, the government
authority will only settle the subsequent amounts owing when the contract is
completed. The invoices sent by Verge to date (including $1 million above)
were as follows:
Year ended 31 March 20X2 $2.8 million
Year ended 31 March 20X3 $1.2 million
The balance will be invoiced on 31 March 20X4. Verge has only accounted for
the initial payment in the financial statements to 31 March 20X2 as no
subsequent amounts are to be paid until 31 March 20X4. The amounts of the
invoices reflect the work undertaken in the period. Verge wishes to know how
to account for the revenue on the contract in the financial statements to date.
Market interest rates are currently at 6%.

[HELP]
Do we account for this like net present value calculation ,get transaction price or is it to be done in some other way.
cos the answer seems to be confusing as the discounting is decreasing and I feel it is wrong..
if not, plz state why

{ANSWER GIVEN]
In the year ended 31 March 20X2, Verge should have recorded revenue of
$2.6 million ($1 million + ($1.8 million × (1/1.062))). Since Verge has received
$1 million cash, a receivable of $1.6 million should have been recognised.
In the year ended 31 March 20X3, revenue should be recorded at $1.13 million
($1.2 million × (1/1.06)). In addition, the discount on the receivable recognised
in the year ended 31 March 20X2 must be unwound. Consequently, there will
be interest income of $96,000 ($1.6 million × 6%).
Prior period error
Prior period errors are omissions from, and misstatements in, the entity’s