- 4 Marks
CR – Nov 2023 – L3 – Q2c – IFRS 15: Revenue from Contracts with Customers
Revenue recognition for a data provider offering real-time and historical data access based on IFRS 15 for the year ended 31 May 2023.
Question
Accra Investors Help (AIH), a large stock market data provider in Ghana, provides stock market data to investors across major markets in Africa.
On 1 June 2022, the data provider sold a client access to its real-time database for three (3) years at an invoiced price of GH¢3.6 million. The client has the right of access to AIH’s database any time, 24 hours each day, to obtain the real-time data about stock prices around the African markets. On the same date, AIH sold to another client for GH¢800,000 access to 30 years of historical data for the next two (2) years. The client has the right to access the data, containing historical information from 1992-2021 (24 hours each day) and is also free to download the data and retain it after the two-year access to AIH’s system has elapsed.
Required:
Advise on how much revenue AIH would recognize for the year ended 31 May 2023 on each of the two contracts. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Contracts, Financial Reporting, Historical Data, Real-Time Data, Revenue Recognition
- Level: Level 3
- Topic: IFRS 15: Revenue from contracts with customers
- Series: NOV 2023