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Hi, I have a question that I don’t understand
Service: The Provider will set up live coffee making stations where various types of artisan coffee will be handmade by the Provider’s highly skilled baristas based on guests’ orders during the event. Complimentary cookies will also be served together with each cup of coffee ordered.
Date: 1 Dec- 3 Dec
Consideration: USD3,000 per day + USD 3.50 per cup of coffee servedRisk and rewards of the services provided are transferred to the Customer when the Provider has satisfied its obligations stated in the contract.
The invoice was issued on 3 Dec to the customer.Is the performance obligation USD 3000 base fee per day for setting up the station and USD 3.50 for making coffee? Should I recognise revenue over the 3 day period each day or only on 3 Dec when the invoice was issued?
Hi,
Given the short time scale of the event then I’d just wait until the event is over and the invoice received to record the revenue.
Technically there is 3,000 USD to be recognised at the end of each day, translated at the exchange rate on the day if the functional currency is different to the USD. Then we would recognise the revenue from the sale of the coffee each day to based upon the number of coffees sold. This too would be recognised using the spot rate at the end of each day.
Thanks
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