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IFRS 15 – Step 1

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 15 – Step 1

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by Stephen Widberg.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • May 4, 2021 at 6:28 pm #619665
    tthenappan
    Member
    • Topics: 4
    • Replies: 4
    • ☆

    Sir I dont even understand anything regard contract combination described on text below. Can you please help sir! Thanks!

    Have attached the extract and can you put in layman’s term so that easy to understand

    Contract Combination

    Combination should be made if the contracts are entered into at or near the same time with the same customer (or related parties of the customer) and at least one of the following criteria are met:

    Contracts are negotiated as a package with a single commercial objective;

    Amount of consideration to be paid in one contract depends on the price or performance of the other contract; or

    Goods or services promised in the contracts (or some goods or services promised in each of the contracts) are a single performance obligation.

    May 5, 2021 at 10:59 am #619737
    Stephen Widberg
    Keymaster
    • Topics: 11
    • Replies: 2837
    • ☆☆☆☆☆

    If I buy a house with a neighbouring field, it may be a single contract.

    Remember the aim of the exam is to explain things in everyday language, so need to examine like a lawyer. Keep it simple. 🙂

    May 5, 2021 at 1:44 pm #619752
    tthenappan
    Member
    • Topics: 4
    • Replies: 4
    • ☆

    Thanks for your reply Sir!

    Just clarifying,

    1. Single commercial objective means Money.

    2. “Single Performance Obligation” means Combo of goods /& services being transfer of control right?

    3. Gist of the story is that Combo of Goods & Services is priced as per IFRS 15’s 5 Step Model? Treated kind of like single contract?

    Thanks a lot for your help Sir!

    Am I right?

    May 6, 2021 at 11:12 am #619859
    Stephen Widberg
    Keymaster
    • Topics: 11
    • Replies: 2837
    • ☆☆☆☆☆

    Single commercial objective = not sure if it means money – it just means that you negotiate the whole bundle together (like a phone contract).

    Point 3 above is what you need.

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