Question 1

What is the final step in revenue recognition under IFRS?

Question 1

A	Identifying the performance obligations
B	Determining the transaction price
C	Allocating the transaction price to each performance obligation
D	Recognizing revenue when each performance obligation is satisfied

Question 2

Table Corp. (Table) is a manufacturer of custom tables and chairs built using reclaimed wood. On April 30, 2020, Table sold and delivered a boardroom table and 12 chairs to Legend Inc. If the customer had paid that day, the total cost would have been $35,000. Instead, Table accepted $15,000 cash on April 30, with a further payment of $25,000 to be made on April 30, 2022. Table has a June 30 year end and prepares its financial statements in accordance with IFRS. What is the total interest revenue that Table will record as a result of this contract for its June 30, 2020, year end (round the interest rate to one decimal point)?

Question 2

A	$393
B	$492
C	$727
D	$2,360

Question 3

Which of the following statements regarding the recognition of expenses related to long-term contracts under IFRS is true?

Question 3 options:

A	General and administrative expenses are normally recognized as an asset.
B	The cost of wasted resources of an abnormally high amount are recognized as an asset until the performance obligation has been met.
C	If capitalized costs are no longer expected to be recovered through the contract, a portion of contract revenue should be reversed.
D	Costs that will be reimbursed by the customer are recognized as an asset.

Question 4

Teal Inc. (Teal) sold and delivered a 3D printer to a large university for total consideration of $18,000. As part of the contract, Teal will provide maintenance services on the printer for a three-year period. On a stand-alone basis, Teal sells that model of printer for $14,000, and the fair value of the maintenance services is $2,000 per year. Assuming that Teal reports under IFRS, what amount of revenue will Teal recognize in the second year of the contract?

Question 4 options:

A	$0
B	$750
C	$1,800
D	$2,000

Question 5

Kaylyn, CPA, is preparing the first set of IFRS financial statements for her employer, Tillo Inc. (Tillo).

Which of the following statements regarding Tillos disclosure requirement of revenue on its financial statements is true?

Question 5 options:

A	Impairment losses on contract assets are disclosed together with other impairment losses.
B	The accounting policies for recognition of only the main source of revenue must be disclosed.
C	Revenue related to contracts with customers will include the opening and closing contract balances.
D	The percentage change in revenue from the companys largest customer compared to the prior year must be disclosed.