Question Tag: Transaction Price

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FR – May 2022 – L2 – SB – Q5 – Revenue from Contracts with Customers (IFRS 15)

Compare contract liabilities and assets, stand-alone selling price vs. transaction price, and assess contract modification criteria.

IFRS 15 – Revenue from Contracts with Customers defines a contract as an agreement between two or more parties that creates enforceable rights and obligations.

Required:
a. Compare with an example, where necessary:
i. Contract liabilities versus contract assets (2½ Marks)
ii. Stand-alone selling price versus transaction price (2½ Marks)

b. Under IFRS 15, highlight SIX criteria to assess a contract. (6 Marks)

c. Explain what is meant by contract modification and state TWO ways in which it can be accounted for. (4 Marks)

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FR – Nov 2021 – L2 – Q3b – Revenue from Contracts with Customers (IFRS 15)

Explain the core principles of IFRS 15 for recognizing revenue from contracts with customers.

IFRS 15 – Revenue from Contracts with Customers sets out principles to be applied in order to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer.

Required:
(i) Explain the core principles upon which IFRS 15 is based. (2 Marks)
(ii) Briefly explain the five-step model involved in the application of the core principles. (5 Marks)

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FR – May 2022 – L2 – SB – Q5 – Revenue from Contracts with Customers (IFRS 15)

Compare contract liabilities and assets, stand-alone selling price vs. transaction price, and assess contract modification criteria.

IFRS 15 – Revenue from Contracts with Customers defines a contract as an agreement between two or more parties that creates enforceable rights and obligations.

Required:
a. Compare with an example, where necessary:
i. Contract liabilities versus contract assets (2½ Marks)
ii. Stand-alone selling price versus transaction price (2½ Marks)

b. Under IFRS 15, highlight SIX criteria to assess a contract. (6 Marks)

c. Explain what is meant by contract modification and state TWO ways in which it can be accounted for. (4 Marks)

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FR – Nov 2021 – L2 – Q3b – Revenue from Contracts with Customers (IFRS 15)

Explain the core principles of IFRS 15 for recognizing revenue from contracts with customers.

IFRS 15 – Revenue from Contracts with Customers sets out principles to be applied in order to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer.

Required:
(i) Explain the core principles upon which IFRS 15 is based. (2 Marks)
(ii) Briefly explain the five-step model involved in the application of the core principles. (5 Marks)

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