Hi,
I know the meaning of distinct but cant understand its meaning in this context.
Performance obligation: is a promise in a contract with a customer to transfer to the customer either:
• a good or service(or a bundle of goods or services) that is distinct, or
• a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer
Any help would be greatly appreciated.
Thanks,
Furqan
Ask the Tutor ACCA FR
IFRS 15 Revenue from contract with customer
9y ago#1It has, in this context, almost the same meaning as 'discrete'
In IFRS 15 the idea that is proposed is that, where goods are delivered over a period of time or where work is rendered over time, it should be possible to identify those goods or services into individual sections each one distinct (and separate) from the others
Effectively it's trying to interpret a contract for a single good or service as an instalment contract involving separate elements that are not necessarily closely related to each other
The example in the IFRS of the delivery of a component or item of ppe that then involves a maintenance period of, say, 3 years illustrates that we can sub-divide the single contract into 2 distinct elements (the item of ppe and the maintenance agreement)
Further, we can sub-divide the maintenance agreement into 3 distinct parts over the 3 year maintenance period
OK?
Yeah its more clear now,thanks Mike.
You guys have been doing a great job for ACCA students.
Furqan
9y ago#3You're welcome - and thanks for those kind words
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