ABC Ltd (ABC), a solar panel manufacturer, entered into a contract on 10 January 2019 with Environmental Agency (EA) to build a solar panel for a total consideration of $4,000,000.

Under the contract, ABC is to do the following tasks:

(1)engineer and design the solar panel according to the agency's specifications and other contract requirements to assure proper operation;

(2)construct the solar panel to the exacting standards and specifications required;

(3)launch the solar panel

ABC began the construction on 1 February 2019 and estimated a total of 2 years to finish constructing and launching the solar panel.

ABC will progressively bill EA for work done based on the estimated percentage-of-completion.

To date, it is estimated that 25% of the work has been completed.

Required:

a)With reference to FRS 115, identify the performance obligation(s) in the contract between ABC and EA. Explain your answer.

You may refer to the respective tasks by their numbers, ie Task (1), Task (2) etc.

b)Is / (Are) the performance obligation(s) identified in (a) above satisfied at a point in time or over time? Explain your answer.

c)Determine when and how the revenue of $4,000,000 is to be recognized in the books of ABC.

d)Suggest one method that ABC may use to estimate the percentage of completion of work done.