Hello,
Regarding contract modification, the modification is accounted for as a separate contract if :
- The price increases by an amount that reflects the stand alone selling prices of the additional goods or services.
Could you please explain what does this mean?
Thanks
Ask the Tutor ACCA SBR
IFRS 15
2y ago#1Please re-read the section in our notes (Section 6 of revenue).
If it still doesn't make sense please come back to me.
Example would be a contract to build a house - modification might be to landscape the garden.
:)
Hello,
I've read the notes however, I am still having some difficulties to understand the idea behind.
Please help me on that.
Thanks.
2y ago#3Example
Hotel prices:
- Room 100
- Breakfast 10
- Room and breakfast 107
Customer buys room only for 100
If she later changes her mind and says she wants breakfast as well:
If the hotel charges her 10 for breakfast - 2 separate contracts
If the charge is only 7 - then 1 single contract (and the price would be pro-rated to the 2 performance obligations).
All very academic :)
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