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- 3 Marks
PT – Nov 2020 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties
Identify the taxable person when goods are sold by an agent or auctioneer.
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- Tags: Agent, Auctioneer, Taxable Person, VAT
- Level: Level 2
- Topic: Value-Added Tax (VAT), Customs, and Excise Duties
- Series: NOV 2020
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- 5 Marks
CR – Mar 2024 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers
This question requires determining whether Odjani Plc should recognize revenue as a principal or agent in the sale of airline tickets, based on IFRS 15.
Question
Odjani Plc (Odjani) negotiates with major local and international airlines to purchase tickets at reduced rates compared with the price of tickets sold directly by the airlines to the public. Odjani agrees to buy a specific number of tickets and must pay for those tickets regardless of whether it is able to resell them. The reduced rate paid by Odjani for each ticket purchased is negotiated and agreed in advance. Odjani determines the prices at which the airline tickets will be sold to its customers. Odjani sells the tickets and collects the consideration from customers when the tickets are purchased. The entity also assists the customers in resolving complaints with the service provided by the airlines. However, each airline is responsible for fulfilling obligations associated with the ticket, including remedies to a customer for dissatisfaction with the service.
Required:
In line with IFRS 15: Revenue from Contracts with Customers, explain whether Odjani is a principal or agent and indicate how it would determine the amount of revenue to recognize from the ticket sales.
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- 3 Marks
PT – Nov 2020 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties
Identify the taxable person when goods are sold by an agent or auctioneer.
Find Related Questions by Tags, levels, etc.
- Tags: Agent, Auctioneer, Taxable Person, VAT
- Level: Level 2
- Topic: Value-Added Tax (VAT), Customs, and Excise Duties
- Series: NOV 2020
Report an error
- 5 Marks
CR – Mar 2024 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers
This question requires determining whether Odjani Plc should recognize revenue as a principal or agent in the sale of airline tickets, based on IFRS 15.
Question
Odjani Plc (Odjani) negotiates with major local and international airlines to purchase tickets at reduced rates compared with the price of tickets sold directly by the airlines to the public. Odjani agrees to buy a specific number of tickets and must pay for those tickets regardless of whether it is able to resell them. The reduced rate paid by Odjani for each ticket purchased is negotiated and agreed in advance. Odjani determines the prices at which the airline tickets will be sold to its customers. Odjani sells the tickets and collects the consideration from customers when the tickets are purchased. The entity also assists the customers in resolving complaints with the service provided by the airlines. However, each airline is responsible for fulfilling obligations associated with the ticket, including remedies to a customer for dissatisfaction with the service.
Required:
In line with IFRS 15: Revenue from Contracts with Customers, explain whether Odjani is a principal or agent and indicate how it would determine the amount of revenue to recognize from the ticket sales.
Find Related Questions by Tags, levels, etc.
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