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On 1 May 2020,Ocean Berhad received RM144,000 rent in advance from its tenant who will rent Ocean Berhad's office building for the period from 1
On 1 May 2020,Ocean Berhad received RM144,000 rent in advance from its tenant who will rent Ocean Berhad's office building for the period from 1 May 2020 until 30 April 2021. Ocean Berhad's accountant recorded the rent received in advance of RM144,000 as revenue in the company's statement of financial performance (income statement) at its reporting date. Ocean Berhad's financial period is from 1 January to 31 December every year.Based on the IASB Conceptual Framework's recognition criteria, discuss whether the accountant had correctly recorded the rent received in advance in the books of Ocean Berhad as at 31 December 2020.
On 1 May 2020,Ocean Berhad received RM144,000 rent in advance from its tenant who will rent Ocean
Berhad's office building for the period from 1 May 2020 until 30 April 2021. Ocean Berhad's accountant recorded the rent received in advance of RM144,000 as revenue in the company's statement of financial performance
(income statement) at its reporting date. Ocean Berhad's financial period is from 1 January to 31 December every year.Based on the IASB Conceptual Framework's recognition criteria, discuss whether the accountant had
correctly recorded the rent received in advance in the books of Ocean Berhad as at 31 December 2020.
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