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6 Cards in this Set
- Front
- Back
IFRS 15: Revenue recognition
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5 step approach
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Step 1
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Identify the contract with the customer -Commercial substance and it is probable that the company will collect the consideration |
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Step 2
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Identify the performance obligations in the contract -Promises to transfer distinct goods or services -Customer can benefit separately |
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Step 3
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Determine the transaction price -Expected amount of the consideration -Penalties -Discounts -Customers right to return goods -Time value of money |
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Step 4
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Allocate the transaction price to the performance obligation |
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Step 5
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Recognise revenue when a performance obligation is satisfied-At a point in time if there is an indicator of when control changes hands-Over time if the customer recieves benefits as the entity performs or the entity creates or enhances the customer's asset
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