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Revenue from contracts with customers (IFRS 15)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Revenue from contracts with customers (IFRS 15)

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by P2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 26, 2016 at 6:40 am #346058
    nari
    Member
    • Topics: 261
    • Replies: 176
    • ☆☆☆

    Hello

    Regarding the above lecture, around the 11 min mark there was example one which mentioned that the handset was “free” but the customer pays $45 per month for service. In the lecture it was mentioned how it would be treated under ias 18 but under ifrs 15 i am a bit confused as to how it would be treated.

    Is it that since the handset is free there is:
    1.no revenue recognized at all for the handset and
    2.revenue is recognized for the monthly service of $45 x 12 months?

    October 26, 2016 at 8:48 pm #346187
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    No. Under IFRS 15 we have to recognise revenue for the handset and then service revenue over the following months.

    I’ll put this in the next videos.

    Thanks

    October 27, 2016 at 8:18 am #346238
    nari
    Member
    • Topics: 261
    • Replies: 176
    • ☆☆☆

    ok, but if that’s the case then the revenue would be $45 + $x (value of handset). The $45 would be cr revenue dr cash or receivables, the value of the handset would be cr revenue but where would the dr go to?

    October 30, 2016 at 7:58 am #346615
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi Nari,

    The second IFRS 15 lecture has been uploaded where you will find the calculations being performed. Using the numbers for the services we would:

    DR Contract receivable
    CR Revenue

    Thanks

  • Author
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