Question 1 21 Marks SofDevelop Ltd (SofDevelop) is a software company who entered into a contract with their new client CoDesign Ltd (CoDesign) on 1 July 2021. Under the contract, SofDevelop is obliged to provide professional services consisting of the development, implementation and testing of the customized software to their client CoDesign. CoDesign has bought the software license for this software from SofDevelop. Furthermore, SofDevelop as part of the contract, will provide post-implementation support for 1 year after the customized software has been delivered. The total contract price is N$ 55 000 for all services included in this contract. SofDevelop assessed its cost for fulfilling the contract as follows: Cost of developers and consultants for development, implementing and testing the customized software: N$ 43 000. Cost of consultants for post-delivery support: N$ 2 000. Total estimated cost of fulfilling the contract: N$ 45 000. The post-implementation support could also be provided by other third parties, in the market, however CoDesign has chosen to use the services of SofDevelop. Due to the complexity of the software, the same software development company has to usually perform both the development, implementation and testing of the customized software. The same profit margin is used by the company to calculate all the individual stand-alone prices of services provided by the company. For the financial year ended 31 December 2021, SofDevelop incurred the following costs of fulfilling the contract: Cost of developers and consultants for development, implementation and testing the customized software: N$ 13 000. Required: a) Please discuss and show how SofDevelop should recognize revenue from the contract with CoDesign in accordance with International Financial Reporting Standards (IFRS) 15, Revenue from Contracts with Customers, for the year ended 31 December 2021. Please show all your calculations. (16) b) Please discuss the criteria which must be met for a contract with a customer to fall within the scope of IFRS 15. (5)