Questions for Lecture 1: IFRS 15 Revenue from Contracts with Customers Due date: Nov.11, 2022 Beijing time According to IFRS 15, an entity will recognise revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer, which requires entities to apply a five-step model as follows: A. 1. Identify the contract(s) with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Recognise revenue when (or as) the entity satisfies a performano obligation 5. Allocate the transaction price to the performance obligations in th contract B. 1. Identify the performance obligations in the contract 2. Identify the customer 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in th contract 5. Recognise revenue when (or as) the entity satisfies a performano obligation C. 1. Identify the contract(s) with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in th contract 5. Recognise revenue when (or as) the entity satisfies a performano obligation stand-alone selling prices? I. Adjusted market assessment approach. II. Expected cost plus a margin approach. III. Residual approach, in limited circumstances. A. I., II. and III. B. I. and II. C. II. and III. D. None of the above 3. Blue Marine Limited sells boats and provides mooring facilities for its customers. Blue Marine sells the boats for $60,000 each and provides mooring facilities for $10,000 per year. Blue Marine sells these goods and services separately; therefore, they are distinct and accounted for as separate performance obligations. Blue Marine enters into a contract to sell a boat and one year of mooring services to a customer for $65,000. Blue Marine Limited will allocate the transaction price of $65,000 to the performance obligations as follows: 4. Construction Co lays railroad track and enters into a contract with Railroad to replace a stretch of track for a fixed fee of $100,000. All work in process is the property of Railroad. Construction Co has replaced 75 units of track out 100 total units of track to be replaced by year end. The effort required of Construction Co is consistent across each of the 100 units of track to be replaced. Construction Co determines that the performance obligation is satisfied over time, as Railroad controls the work in process asset being created. Construction Co should recognise revenue totalling: A. $100,000 B. $75,000 C. $25,000 D. $175,000 5. Data Co sells computer hardware and provides data storage and maintenance services. At the beginning of the year, it enters into a contract with a customer to sell computer hardware worth $3m and provide 2year data maintenance services at $7m. By year end, it satisfactorily delivered all the hardware and 1-year services. Data Co. should recognize revenue totalling: A. $6.5m B. $3.0m Questions for Lecture 1: IFRS 15 Revenue from Contracts with Customers Due date: Nov.11, 2022 Beijing time According to IFRS 15, an entity will recognise revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer, which requires entities to apply a five-step model as follows: A. 1. Identify the contract(s) with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Recognise revenue when (or as) the entity satisfies a performano obligation 5. Allocate the transaction price to the performance obligations in th contract B. 1. Identify the performance obligations in the contract 2. Identify the customer 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in th contract 5. Recognise revenue when (or as) the entity satisfies a performano obligation C. 1. Identify the contract(s) with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in th contract 5. Recognise revenue when (or as) the entity satisfies a performano obligation stand-alone selling prices? I. Adjusted market assessment approach. II. Expected cost plus a margin approach. III. Residual approach, in limited circumstances. A. I., II. and III. B. I. and II. C. II. and III. D. None of the above 3. Blue Marine Limited sells boats and provides mooring facilities for its customers. Blue Marine sells the boats for $60,000 each and provides mooring facilities for $10,000 per year. Blue Marine sells these goods and services separately; therefore, they are distinct and accounted for as separate performance obligations. Blue Marine enters into a contract to sell a boat and one year of mooring services to a customer for $65,000. Blue Marine Limited will allocate the transaction price of $65,000 to the performance obligations as follows: 4. Construction Co lays railroad track and enters into a contract with Railroad to replace a stretch of track for a fixed fee of $100,000. All work in process is the property of Railroad. Construction Co has replaced 75 units of track out 100 total units of track to be replaced by year end. The effort required of Construction Co is consistent across each of the 100 units of track to be replaced. Construction Co determines that the performance obligation is satisfied over time, as Railroad controls the work in process asset being created. Construction Co should recognise revenue totalling: A. $100,000 B. $75,000 C. $25,000 D. $175,000 5. Data Co sells computer hardware and provides data storage and maintenance services. At the beginning of the year, it enters into a contract with a customer to sell computer hardware worth $3m and provide 2year data maintenance services at $7m. By year end, it satisfactorily delivered all the hardware and 1-year services. Data Co. should recognize revenue totalling: A. $6.5m B. $3.0m