Question Tag: IFRS 15

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 5 Marks

FR – Nov 2024 – L2 – Q5d – Revenue Recognition under IFRS 15

Analyzing distinct performance obligations in a software contract under IFRS 15.

Togbah LTD (Togbah), a software developer, enters into a contract with a customer to transfer the following:

  • Software licence
  • Installation service (includes changing the web screen for each user)
  • Software updates
  • Technical support for two years

Togbah sells the above separately. The installation service is routinely performed by other entities and does not significantly modify the software. The software remains functional without the updates and the technical support.

Required:
Explain whether the goods or services promised to the customer are distinct in terms of IFRS 15: Revenue from Contracts with Customers

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2024 – L2 – Q5d – Revenue Recognition under IFRS 15"

  • 5 Marks

FR – Nov 2024 – L2 – Q5c – Revenue Recognition under IFRS 15

Assessing whether goods and services in a contract are distinct under IFRS 15.

Togbah LTD (Togbah), a software developer, enters into a contract with a customer to transfer the following:

  • Software licence,
  • Installation service (includes changing the web screen for each user),
  • Software updates, and
  • Technical support for two years.

Togbah sells the above separately. The installation service is routinely performed by other entities and does not significantly modify the software. The software remains functional without the updates and the technical support.

Required:
Explain whether the goods or services promised to the customer are distinct in terms of IFRS 15: Revenue from Contracts with Customers.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2024 – L2 – Q5c – Revenue Recognition under IFRS 15"

  • 9 Marks

CR – May 2017 – L3 – Q7a – Revenue Recognition (IFRS 15)

Itemize and discuss the five-step model for revenue recognition under IFRS 15.

Megida hopes to obtain contracts from both the private and public sectors following the new government economic initiatives. The company’s revenue had always been accounted for in line with IAS 18, as the company had adopted IFRS. Some directors of Megida understand that with the introduction of IFRS 15: Revenue from Contracts, the way revenue from contracts is recognized may change. In particular, one of them who attended an IFRS training organized by the Institute of Chartered Accountants of Nigeria (ICAN) heard about IFRS 15 and its five-step model for revenue recognition but did not understand.

Required:
Itemize and briefly discuss the FIVE-step model approach to revenue recognition under IFRS 15. (9 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2017 – L3 – Q7a – Revenue Recognition (IFRS 15)"

  • 10 Marks

CR – May 2023 – L3 – Q4a – Revenue Recognition (IFRS 15)

Discuss the criteria for a contract to fall under IFRS 15 for revenue recognition.

There has been significant divergence in practice over the recognition of revenue, mainly because International Financial Reporting Standards (IFRSs) contain limited guidance in certain areas. The International Accounting Standards Board (IASB), as a result of its joint project with the US Financial Accounting Standards Board (FASB), has issued IFRS 15 – Revenue from Contracts with Customers.

IFRS 15 sets out a five-step model, which applies to revenue earned from a contract with a customer with limited exceptions, regardless of the type of revenue transaction or the industry. Step one in the five-step model requires the identification of the contract with the customer and is critical for the purpose of applying the standard. The remaining four steps in the standard’s revenue recognition model are irrelevant if the contract does not fall within the scope of IFRS 15.

Required:

Discuss the criteria which must be met for a contract with a customer to fall within the scope of IFRS 15. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2023 – L3 – Q4a – Revenue Recognition (IFRS 15)"

  • 20 Marks

AAA – Nov 2020 – L3 – Q4 – Audit of IT Systems and Data Analytics

Discuss IT controls and the five-step revenue recognition model in a retail environment adapting to online sales.

Holloway Interiors Limited operates a large shop at Garki, Abuja. The company’s year-end is April 30. It sells high-end furniture and provides interior decoration services. Typically, sales begin with a customer signing an invoice prepared by a sales clerk, who then records the sale in the system and prints a receipt in duplicate, one for the customer and one for filing. The customer either takes the product or arranges for delivery by the company.

Due to the COVID-19 lockdown in Abuja, Holloway Interiors closed its physical showroom, shifted all sales online, and allowed delivery after payment or on a cash-on-delivery basis. Delivery may take up to a week after the online sale is initiated.

You are the Audit Manager for Holloway Interiors Limited.

Required:
a. Discuss the general IT controls expected in Holloway Interiors. (10 Marks)
b. Explain the FIVE steps model for recognizing revenue under IFRS 15: Revenue from Contracts with Customers. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2020 – L3 – Q4 – Audit of IT Systems and Data Analytics"

  • 4 Marks

FR – Nov 2019 – L2 – Q6c – Revenue from Contracts with Customers (IFRS 15)

Explain the financial reporting treatment for returned products under IFRS 15.

On September 20, 2019, Phonetell Nigeria Limited sold 100 units of Android PT-Tablet to a major customer for N200,000 each. The PT-Tablet costs Phonetell Nigeria Limited N160,000 each.

The terms of sales are that the customers have the right to return the tablets for a full refund within 3 months. On expiration of the 3 months period, the customer can no longer return the PT-Tablet, and payment becomes immediately due. Phonetell has entered into transactions of this type with these customers previously and can reliably estimate that 4% of the Android PT-Tablets are likely to be returned within the three-month period.

Required:

Explain how the above transactions would be reported in the financial statements of Phonetell Nigeria Limited for the year ended September 30, 2019.
(4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q6c – Revenue from Contracts with Customers (IFRS 15)"

  • 10 Marks

FR – Nov 2019 – L2 – Q6b – Revenue from Contracts with Customers (IFRS 15)

Calculate the revenue from the service contract with customers for Phonetell Nigeria Limited for the accounting years ended 2019 and 2020.

Phonetell Nigeria Limited is a network service provider registered with the Nigeria Stock Exchange (NSE). The company has been operating in the country for the past 10 years.

On September 1, 2019, the company entered into a service contract with its customers to provide a special model handset and one year of service at a price of N250,000.

If the customers acquired the handset only, it would be sold at a price of N75,000, and if the network service is separately provided for one year duration, the customer will be made to pay the sum of N200,000 for the one-year duration.

The financial year-end of Phonetell Nigeria Limited is September 30.

Required:

Calculate the revenue from this contract for the accounting years ended 2019 and 2020 in accordance with the provisions of IFRS 15.
(10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q6b – Revenue from Contracts with Customers (IFRS 15)"

  • 6 Marks

FR – Nov 2019 – L2 – Q6a – Revenue from Contracts with Customers (IFRS 15)

Identify and explain the five-step model for recognizing revenue from contracts under IFRS 15.

IFRS 15 on revenue from contracts with customers was issued for the purpose of ensuring that revenue is properly accounted for, better than what we have under IAS 18 and IAS 11.

Required:

i. Identify the FIVE-step model that needs to be followed by entities when recognizing revenue from contracts under IFRS 15.

ii. Explain how IFRS 15 is expected to improve the financial reporting of revenue.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q6a – Revenue from Contracts with Customers (IFRS 15)"

  • 7 Marks

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)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2021 – L2 – Q3b – Revenue from Contracts with Customers (IFRS 15)"

  • 7 Marks

FR – May 2020 – L2 – Q2a – Revenue Recognition under IFRS 15

Determine the appropriate accounting treatment for a sales transaction with a free two-year maintenance contract under IFRS 15.

Ejura Ltd (Ejura) is a manufacturing and retail company that prepares financial statements in accordance with International Financial Reporting Standards (IFRS) up to 31 December each year.

In order to generate or improve sales on one of its older products, Ejura offered a promotion named ‘something for free.’ The promotion included free maintenance services for the first two years. On 1 October 2019, under the promotional offer, Ejura sold goods to a supermarket chain for GH¢4.4 million. A two-year maintenance contract would normally be sold for GH¢0.5 million, and the list price of the product would normally be GH¢5 million. The transaction has been included in revenue at GH¢4.4 million.

Required:
In accordance with IFRS 15: Revenue from Contracts with Customers, justify the appropriate accounting treatment for the above transaction in the financial statements of Ejura for the year ended 31 December 2019.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2020 – L2 – Q2a – Revenue Recognition under IFRS 15"

  • 5 Marks

FR – Nov 2024 – L2 – Q5d – Revenue Recognition under IFRS 15

Analyzing distinct performance obligations in a software contract under IFRS 15.

Togbah LTD (Togbah), a software developer, enters into a contract with a customer to transfer the following:

  • Software licence
  • Installation service (includes changing the web screen for each user)
  • Software updates
  • Technical support for two years

Togbah sells the above separately. The installation service is routinely performed by other entities and does not significantly modify the software. The software remains functional without the updates and the technical support.

Required:
Explain whether the goods or services promised to the customer are distinct in terms of IFRS 15: Revenue from Contracts with Customers

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2024 – L2 – Q5d – Revenue Recognition under IFRS 15"

  • 5 Marks

FR – Nov 2024 – L2 – Q5c – Revenue Recognition under IFRS 15

Assessing whether goods and services in a contract are distinct under IFRS 15.

Togbah LTD (Togbah), a software developer, enters into a contract with a customer to transfer the following:

  • Software licence,
  • Installation service (includes changing the web screen for each user),
  • Software updates, and
  • Technical support for two years.

Togbah sells the above separately. The installation service is routinely performed by other entities and does not significantly modify the software. The software remains functional without the updates and the technical support.

Required:
Explain whether the goods or services promised to the customer are distinct in terms of IFRS 15: Revenue from Contracts with Customers.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2024 – L2 – Q5c – Revenue Recognition under IFRS 15"

  • 9 Marks

CR – May 2017 – L3 – Q7a – Revenue Recognition (IFRS 15)

Itemize and discuss the five-step model for revenue recognition under IFRS 15.

Megida hopes to obtain contracts from both the private and public sectors following the new government economic initiatives. The company’s revenue had always been accounted for in line with IAS 18, as the company had adopted IFRS. Some directors of Megida understand that with the introduction of IFRS 15: Revenue from Contracts, the way revenue from contracts is recognized may change. In particular, one of them who attended an IFRS training organized by the Institute of Chartered Accountants of Nigeria (ICAN) heard about IFRS 15 and its five-step model for revenue recognition but did not understand.

Required:
Itemize and briefly discuss the FIVE-step model approach to revenue recognition under IFRS 15. (9 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2017 – L3 – Q7a – Revenue Recognition (IFRS 15)"

  • 10 Marks

CR – May 2023 – L3 – Q4a – Revenue Recognition (IFRS 15)

Discuss the criteria for a contract to fall under IFRS 15 for revenue recognition.

There has been significant divergence in practice over the recognition of revenue, mainly because International Financial Reporting Standards (IFRSs) contain limited guidance in certain areas. The International Accounting Standards Board (IASB), as a result of its joint project with the US Financial Accounting Standards Board (FASB), has issued IFRS 15 – Revenue from Contracts with Customers.

IFRS 15 sets out a five-step model, which applies to revenue earned from a contract with a customer with limited exceptions, regardless of the type of revenue transaction or the industry. Step one in the five-step model requires the identification of the contract with the customer and is critical for the purpose of applying the standard. The remaining four steps in the standard’s revenue recognition model are irrelevant if the contract does not fall within the scope of IFRS 15.

Required:

Discuss the criteria which must be met for a contract with a customer to fall within the scope of IFRS 15. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – May 2023 – L3 – Q4a – Revenue Recognition (IFRS 15)"

  • 20 Marks

AAA – Nov 2020 – L3 – Q4 – Audit of IT Systems and Data Analytics

Discuss IT controls and the five-step revenue recognition model in a retail environment adapting to online sales.

Holloway Interiors Limited operates a large shop at Garki, Abuja. The company’s year-end is April 30. It sells high-end furniture and provides interior decoration services. Typically, sales begin with a customer signing an invoice prepared by a sales clerk, who then records the sale in the system and prints a receipt in duplicate, one for the customer and one for filing. The customer either takes the product or arranges for delivery by the company.

Due to the COVID-19 lockdown in Abuja, Holloway Interiors closed its physical showroom, shifted all sales online, and allowed delivery after payment or on a cash-on-delivery basis. Delivery may take up to a week after the online sale is initiated.

You are the Audit Manager for Holloway Interiors Limited.

Required:
a. Discuss the general IT controls expected in Holloway Interiors. (10 Marks)
b. Explain the FIVE steps model for recognizing revenue under IFRS 15: Revenue from Contracts with Customers. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2020 – L3 – Q4 – Audit of IT Systems and Data Analytics"

  • 4 Marks

FR – Nov 2019 – L2 – Q6c – Revenue from Contracts with Customers (IFRS 15)

Explain the financial reporting treatment for returned products under IFRS 15.

On September 20, 2019, Phonetell Nigeria Limited sold 100 units of Android PT-Tablet to a major customer for N200,000 each. The PT-Tablet costs Phonetell Nigeria Limited N160,000 each.

The terms of sales are that the customers have the right to return the tablets for a full refund within 3 months. On expiration of the 3 months period, the customer can no longer return the PT-Tablet, and payment becomes immediately due. Phonetell has entered into transactions of this type with these customers previously and can reliably estimate that 4% of the Android PT-Tablets are likely to be returned within the three-month period.

Required:

Explain how the above transactions would be reported in the financial statements of Phonetell Nigeria Limited for the year ended September 30, 2019.
(4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q6c – Revenue from Contracts with Customers (IFRS 15)"

  • 10 Marks

FR – Nov 2019 – L2 – Q6b – Revenue from Contracts with Customers (IFRS 15)

Calculate the revenue from the service contract with customers for Phonetell Nigeria Limited for the accounting years ended 2019 and 2020.

Phonetell Nigeria Limited is a network service provider registered with the Nigeria Stock Exchange (NSE). The company has been operating in the country for the past 10 years.

On September 1, 2019, the company entered into a service contract with its customers to provide a special model handset and one year of service at a price of N250,000.

If the customers acquired the handset only, it would be sold at a price of N75,000, and if the network service is separately provided for one year duration, the customer will be made to pay the sum of N200,000 for the one-year duration.

The financial year-end of Phonetell Nigeria Limited is September 30.

Required:

Calculate the revenue from this contract for the accounting years ended 2019 and 2020 in accordance with the provisions of IFRS 15.
(10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q6b – Revenue from Contracts with Customers (IFRS 15)"

  • 6 Marks

FR – Nov 2019 – L2 – Q6a – Revenue from Contracts with Customers (IFRS 15)

Identify and explain the five-step model for recognizing revenue from contracts under IFRS 15.

IFRS 15 on revenue from contracts with customers was issued for the purpose of ensuring that revenue is properly accounted for, better than what we have under IAS 18 and IAS 11.

Required:

i. Identify the FIVE-step model that needs to be followed by entities when recognizing revenue from contracts under IFRS 15.

ii. Explain how IFRS 15 is expected to improve the financial reporting of revenue.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2019 – L2 – Q6a – Revenue from Contracts with Customers (IFRS 15)"

  • 7 Marks

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)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2021 – L2 – Q3b – Revenue from Contracts with Customers (IFRS 15)"

  • 7 Marks

FR – May 2020 – L2 – Q2a – Revenue Recognition under IFRS 15

Determine the appropriate accounting treatment for a sales transaction with a free two-year maintenance contract under IFRS 15.

Ejura Ltd (Ejura) is a manufacturing and retail company that prepares financial statements in accordance with International Financial Reporting Standards (IFRS) up to 31 December each year.

In order to generate or improve sales on one of its older products, Ejura offered a promotion named ‘something for free.’ The promotion included free maintenance services for the first two years. On 1 October 2019, under the promotional offer, Ejura sold goods to a supermarket chain for GH¢4.4 million. A two-year maintenance contract would normally be sold for GH¢0.5 million, and the list price of the product would normally be GH¢5 million. The transaction has been included in revenue at GH¢4.4 million.

Required:
In accordance with IFRS 15: Revenue from Contracts with Customers, justify the appropriate accounting treatment for the above transaction in the financial statements of Ejura for the year ended 31 December 2019.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2020 – L2 – Q2a – Revenue Recognition under IFRS 15"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan