PROBLEMS Problem l-1: nature and meaning of the contract in the scope of IFRS 15 Kamul Company is the car dealer. As a typical operation, Kamui will arrange one car for client's driving test. Of course, that tested-car will have a useful life more than 1 year After one year, Kamui will sell the tested-car which is not in use, right away. Kamui is known to be the dealer for the brand new cars as well as the used cars. Question Should Kamui recognize revenue or gain from the sale of tested-car which is not in use? Problem 1-2: definition of "customer" in IFRS 15 Deliciongso Co. is in food industry. During the year 2019, Deliciongso sells one of its building and land to Big Bear Ltd. Question Does Big Bear Ltd. fit in the definition of "customer" in IFRS 15? Problem 1-3: nature and meaning of the contract in the scope of IFRS 15 Fairy Corporation is in commodity retail business. Typically, Fairy will deliver its goods after it receives the client's purchase order approved by legal authorized signature. On 20 December 2018, Fairy received a purchase order without approved signature from a long time relationship client. The client's purchasing unit had asked for a favor to transfer the goods within 22 December, 2018, as the company needed to use them urgently. And for the legal authorized purchase order, the client's purchasing unit would send it immediately, after the New Year. Fairy considered the long-time relationship, then, Fairy decided to deliver the goods on 22 December, 2018. So, at the end of the year 2018, the client consequently received the goods and already signed on inventory delivery order. Question Can this case be identified as a "contract" and "customer" in IFRS 15 even if the purchase order is unauthorized? Problem 1-4: identify performance obligation in a contract Soft Dimension Company is in information technology business. March 20X9, Soft Dimension signs a contract for selling a license to use its software without termination which including installation services. Besides that both parties agree to include three e of technical support and unspecified future upgrades in the years after sale service of technical support and uns contract. The installation services do not require an expertise customer can have any outsource to perform the task. o not require an expertise or high technical skills so, the Question How many performance obligations include in the contri Problem 1-5: identify performance obligation in a contract Cloud Ltd. sells popular brand Cell phone. Each sale contract, a customer one package of goods and services as follow; Price 25,000 12,000 1,500 1. Cell phone 2. Service fee for 12 months, 81,000 per month. 3. One-year Warranty for malfunctions or defect problem. 4. Option for purchasing additional One-Year Warranty for malfunctions or defect problem. 5. 1 Coupon for the discount on next purchasing at Cloud Ltd. 6. 1 coupon for the discount on 1 coffee cup at Italian Coffee 500 300 Question How many performance obligations include in the contract? Problem 1-6: Allocate the transaction price to the performance obligations- Significant financing components in contracts 2 January 25x1, Merry Company signed a sale contract with Boss Company. Today, the identified goods has $2,000,000 cash price. The cost of the goods is $1,200,000. The agreement written in the contract is as follow: 1) Merry allows its customer to pay in installment system for two years. Boss has to pay a fixed amount of $92,000 on monthly basis. The first installment payment will be on 31 January 25X1. 2) Merry delivers the goods to Boss's warehouse on 2 January 25x1. 3) The latest borrowing interest rate for companies in the same credit rating class as Boss is 9.7%. Question Is there a significant financing component in the contract? How to journalize the transactions for 20X1-20x2? Problem 1-7: identify "contract" in IFRS 15 and the transaction price Famous House sold its goods to Smile Department Store at a price of $4,000 (n/45). From Smile's policy, it will publish and distribute its pamphlet each month to advertise all goods in the department store. Regard to that policy, Famous House has to share the advertising expense by paying Smile $100 cash. Additional information: Generally, such type of advertising will be $30. Question What is the transaction price for this case? Problem 1-8: allocation of transaction price Flexie Machinery signs a contract to sell special machine with installation service at a price of $200,000. Besides that, the agreements include the following: 1. Provide in-house training on the handling and supervising of machinery 3 classes for free. Each class will take two days in a row. 2. Provide maintenance service one year for free, 4 times. The standalone selling prices of the obligations within the contract are: Type of goods and services Total Standalone selling price (8) Special machine 180,000 Installation service 20,000 In-house training 3 classes 12,000 Maintenance service 4 times 8,000 Total 220,000 Question What is the transaction price for each performance obligations? PROBLEMS Problem l-1: nature and meaning of the contract in the scope of IFRS 15 Kamul Company is the car dealer. As a typical operation, Kamui will arrange one car for client's driving test. Of course, that tested-car will have a useful life more than 1 year After one year, Kamui will sell the tested-car which is not in use, right away. Kamui is known to be the dealer for the brand new cars as well as the used cars. Question Should Kamui recognize revenue or gain from the sale of tested-car which is not in use? Problem 1-2: definition of "customer" in IFRS 15 Deliciongso Co. is in food industry. During the year 2019, Deliciongso sells one of its building and land to Big Bear Ltd. Question Does Big Bear Ltd. fit in the definition of "customer" in IFRS 15? Problem 1-3: nature and meaning of the contract in the scope of IFRS 15 Fairy Corporation is in commodity retail business. Typically, Fairy will deliver its goods after it receives the client's purchase order approved by legal authorized signature. On 20 December 2018, Fairy received a purchase order without approved signature from a long time relationship client. The client's purchasing unit had asked for a favor to transfer the goods within 22 December, 2018, as the company needed to use them urgently. And for the legal authorized purchase order, the client's purchasing unit would send it immediately, after the New Year. Fairy considered the long-time relationship, then, Fairy decided to deliver the goods on 22 December, 2018. So, at the end of the year 2018, the client consequently received the goods and already signed on inventory delivery order. Question Can this case be identified as a "contract" and "customer" in IFRS 15 even if the purchase order is unauthorized? Problem 1-4: identify performance obligation in a contract Soft Dimension Company is in information technology business. March 20X9, Soft Dimension signs a contract for selling a license to use its software without termination which including installation services. Besides that both parties agree to include three e of technical support and unspecified future upgrades in the years after sale service of technical support and uns contract. The installation services do not require an expertise customer can have any outsource to perform the task. o not require an expertise or high technical skills so, the Question How many performance obligations include in the contri Problem 1-5: identify performance obligation in a contract Cloud Ltd. sells popular brand Cell phone. Each sale contract, a customer one package of goods and services as follow; Price 25,000 12,000 1,500 1. Cell phone 2. Service fee for 12 months, 81,000 per month. 3. One-year Warranty for malfunctions or defect problem. 4. Option for purchasing additional One-Year Warranty for malfunctions or defect problem. 5. 1 Coupon for the discount on next purchasing at Cloud Ltd. 6. 1 coupon for the discount on 1 coffee cup at Italian Coffee 500 300 Question How many performance obligations include in the contract? Problem 1-6: Allocate the transaction price to the performance obligations- Significant financing components in contracts 2 January 25x1, Merry Company signed a sale contract with Boss Company. Today, the identified goods has $2,000,000 cash price. The cost of the goods is $1,200,000. The agreement written in the contract is as follow: 1) Merry allows its customer to pay in installment system for two years. Boss has to pay a fixed amount of $92,000 on monthly basis. The first installment payment will be on 31 January 25X1. 2) Merry delivers the goods to Boss's warehouse on 2 January 25x1. 3) The latest borrowing interest rate for companies in the same credit rating class as Boss is 9.7%. Question Is there a significant financing component in the contract? How to journalize the transactions for 20X1-20x2? Problem 1-7: identify "contract" in IFRS 15 and the transaction price Famous House sold its goods to Smile Department Store at a price of $4,000 (n/45). From Smile's policy, it will publish and distribute its pamphlet each month to advertise all goods in the department store. Regard to that policy, Famous House has to share the advertising expense by paying Smile $100 cash. Additional information: Generally, such type of advertising will be $30. Question What is the transaction price for this case? Problem 1-8: allocation of transaction price Flexie Machinery signs a contract to sell special machine with installation service at a price of $200,000. Besides that, the agreements include the following: 1. Provide in-house training on the handling and supervising of machinery 3 classes for free. Each class will take two days in a row. 2. Provide maintenance service one year for free, 4 times. The standalone selling prices of the obligations within the contract are: Type of goods and services Total Standalone selling price (8) Special machine 180,000 Installation service 20,000 In-house training 3 classes 12,000 Maintenance service 4 times 8,000 Total 220,000 Question What is the transaction price for each performance obligations