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Sir, In syllabus criteria B10 -c, (Describe the acceptable methods for measuring progress towards complete satisfactions of performance obligation )
I am bit confused for this, could you please help me out for the answer
ThanksWe’re looking at situations where the supplier is contracted to provide a service following the supply of, for example, heavy machinery
So there is an ongoing obligation (typically in an exam it’s for 3 years) and we need to isolate the revenue derived from servicing from the revenue derived from the sale and supply of the machinery
There is also the issue where a contractor is tied into a contract to construct an asset, for example a bridge, and we need to know what percentage of work has been completed in order that we c an compute the revenue to be recognised
There are a number of different ways in which that percentage completed may be calculated (cost to date as a percentage of total estimated cost, percentage complete as certified by an independent engineer, revenue earned as a percentage of total revenue on the contract and so on)
I believe that that explains the syllabus extract
OK?
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