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IFRS 15: Revenue Recognition

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 15: Revenue Recognition

  • This topic has 5 replies, 2 voices, and was last updated 2 years ago by Stephen Widberg.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • April 27, 2021 at 6:39 pm #619013
    jareerabedin
    Member
    • Topics: 91
    • Replies: 72
    • ☆☆

    Dear Sir,
    Could you kindly explain what does it mean, when an entity says “It concludes that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will occur”.

    also, what does it mean, when an entity says “variable consideration is constrained in accordance with IFRS 15”

    Thank you sir

    April 28, 2021 at 11:42 am #619072
    Stephen Widberg
    Keymaster
    • Topics: 15
    • Replies: 3073
    • ☆☆☆☆☆

    First sentence means that you can recognise variable consideration (e.g. bonus for completing work early) if it is EXTREMELY LIKELY that you will receive it.

    Second sentence means nothing at all!

    April 28, 2021 at 11:48 am #619073
    jareerabedin
    Member
    • Topics: 91
    • Replies: 72
    • ☆☆

    Thank you
    But sir for the first sentence, it says cumulative revenue will be reversed, doesn’t that mean it is extremely unlikely instead of extremely likely as you said?
    Thanks

    April 29, 2021 at 10:43 am #619166
    Stephen Widberg
    Keymaster
    • Topics: 15
    • Replies: 3073
    • ☆☆☆☆☆

    Specifically, variable consideration is only included in the transaction price if, and to the extent that, it is highly probable that its inclusion will not result in a significant revenue reversal in the future when the uncertainty has been subsequently resolved

    IAS 15 Para 56

    Stick with me on this one (unless we are talking about something completely different).

    And remember examiner wants simple explanations!

    April 30, 2021 at 8:03 am #619251
    jareerabedin
    Member
    • Topics: 91
    • Replies: 72
    • ☆☆

    Thank you so much sir!!

    April 30, 2021 at 3:00 pm #619306
    Stephen Widberg
    Keymaster
    • Topics: 15
    • Replies: 3073
    • ☆☆☆☆☆

    My pleasure

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘IFRS 15: Revenue Recognition’ is closed to new replies.

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