IFRS 15 Revenue Guide

IFRS 15
REVENUE FROM CONTRACTS WITH CUSTOMERS

FIVE STEP MODEL
Step 1: Identify the contract(s) with customer
Step 2: Identify the performance of obligations in the

contract
Step 3: Determine the Transaction price
Step 4: Allocate the transaction price to performance

obligations in the contract
Step 5: Recognize revenue when (or as) the entity

satisfies a performance obligation
Step 1: Identify the contract(s) with
customer
A contract is an agreement between two or more

parties that creates enforceable rights and
obligations.
Enforceability of the rights and obligation in a
contract is a matter of law.
Contracts can be written, oral or implied by an
entitys customary business practices.
Step 1: Identify the contract(s) with
customer
A contract is within the scope of the model only when all of the following
criteria are met
The parties of the The entity can The entity can The contract has It is probable that
contract have identify each partys identify the payment commercial the entity will collect
approved the rights regarding the terms for the goods substance and the consideration
contract.. And are goods or services to or services to
committed to be transferred. transferred
perform their
respective obligation
Step 2: Identify the performance of
A performance obligation is a promise to transfer to the customer either:
A good or service (or a A series of distinct goods or services that

bundle of goods or or are substantially the same and that have
services) that is the same pattern transfer to the customer
distinct
Includes implied promises which do not need to be enforceable by law.

(e.g implied by customary business practices, published policies or specific
statements)
A series of distinct goods or services has the same pattern of transfer to the
customer if both of the following criteria are met:
Each distinct good or The same method would be

services in the series that used to measure the entitys
the entity promises to and progress towards complete
transfer to the customer satisfaction of the
would meet the criteria to performance obligation to
be a performance obligation transfer each distinct good
over time. or service in the series to
the customer.
A good or service that is promised to customer is distinct if both of the
following criteria are met:
The customer can be The entitys promise to

benefit from the good or transfer the good or
service either on its own or and service to the customer is
together with other separately identifiable
resources that are readily from other promises in the
available to the customer. contract.
If not distinct, combine that good or service with other promised goods or
services until it identifies a bundle of goods or services that distinct.
PERFORMANCE OBLIGATION- SINGLE VS. SEPARATE
In each of the following cases, identify the performance obligation (s)
Case A. Aircraft Company signs a contract to sell airplanes to Singapore Airlines for P300 million. Aircraft also agreed to maintain the
planes in the amount of P60 million for three years.
Case B. Delta Motors sells an automobile to Speed Auto Dealers at a price that includes six months of telematics services such as
navigation and remote diagnostics. These telematics services are regularly sold on a stand alone basis by Delta Motors from a monthly
fee. After six month period the consumer can renew these services on a fee basis with Delta Motors.
Case C. NovTech Inc. licenses customer-relationship software to XYZ Company. In addition to providing the software itself, NovTech
promises to perform consulting services by extensively customizing the software to XYZs Information Technology environment, for a
total consideration of P1,800,000.
Case D. ABC Computer Inc. manufactures and sells computers that include warranty to make good on any defect in its computers for
120 days. In addition, it sells separately extended warranty, which provides protection from defects for 3 yrs beyond the 120 days.
Case E. FitX is an online fitness community, offering access to workout routines, nutrition advice and FitX coaches. Customers pay a
P4,000 fee to become registered on the website and then pay P500 per month for access to all FitX Services.
Case H. MasterDust Vacuums sells the ultra vacuum cleaner. Each Ultra has six-month
warranty that covers any product defects. When customers purchase an Ultra, they also
have the option to purchase an extended two-year warranty that covers any breakage or
maintenance. The extended warranty sells for the same amount regardless of whether it
is purchased at the time as the Ultra or at some other time.
Case G. Buff & FitNess Center is a health club that offer members various gym services.
Assume Buff & FitNess offers a deal whereby enrolling in a new membership for P14,000
provides a year of unlimited access to facilities and also entitles the member to receive a
voucher redeemable for 25% off yoga classes for one year. The yoga classes are offered to
gym members as well as to general public. A new membership normally sells for P16,800
and a one year enrollment in yoga classes sells an additional P7,000.
Step 2: Identify the performance of obligations
in the contract
Case H. NOP Company enters into a contract to build, run, and maintain a highly complex piece of
electronic equipment for a period of 5 yrs. Commencing upon delivery of the equipment. There is a
fixed fee for each build, run, and maintenance deliverables, and any progress payments made are
non-refundable. All the deliverables has a stand alone value. There is a verifiable evidence of the
selling price for the building and maintenance but not for running equipment.
Case I. Entity J is a software development company that provides hosting services to a variety of
consumer product entities. Entity J offers a hosted inventory management software product that
requires the customer to purchase hardware from Entity J. the hardware, is always sold in a package
and the customer cannot use the hardware on its own or with resources readily available to it. In
Addition, customers may purchase professional services from Entity J to migrate historical data and
create interfaces with existing back office accounting systems. Entity J always delivers the hardware
first, followed by professional services and finally, the on going hosting services.
An entity shall consider the terms of the contract and it
customary business practices to determine the transaction
price.
The transaction price is the amount of consideration to
which an entity expects to be entitled in exchange for
transferring promised goods or services to customer,
excluding amounts collected on behalf of third parties
The consideration promised in a contract with a customer
may include fixed amounts, variable amounts, or both.
When determining the transaction price an entity shall consider the effects of
all of the following:
Variable consideration: An entity shall estimate the amount of consideration to which the entity will
be entitled in exchange for transferring the promised goods or services to a customer.
Constraining estimates of variable consideration: amount of variable consideration estimated

should include amount only to the extent that it is highly probable that a significant reversal of
revenue recognized will not occur.
The existence of a significant financing component in the contract: adjust the promised amount of
consideration for the effects of the time value of money.
When determining the transaction price an entity shall consider the effects of
all of the following: (continuation)
Non cash consideration: an entity shall measure the non cash consideration at fair value. If cannot be
reasonably estimated, entity shall use the stand alone selling price of the goods or services promised
to the customer in exchange for the consideration
Consideration payable to a customer: Reduction of the transaction price and, therefore of revenue
unless the payment to the customer is in exchange for a distinct good or service.
Variable consideration and constraining estimates of variable consideration
Variability may be explicitly stated in the contract. In addition to the terms of the contract, the
promised consideration is variable if either of the following exist:
The customer has a valid expectation arising from an entitys customary business practices,
published policies or specific statements that the entity will accept an amount of consideration
that is less than the price of stated in the contract.
Other facts and circumstances indicate that the entitys intention, when entering into a
contract, is to offer a price concession to the customer.
Methods in estimating the amount of variable consideration:
Expected value: the sum of probability-weighted amounts in range of possible

consideration amounts
The most likely amount: the single most likely amount in a range of possible
consideration amounts.
Note: an entity shall apply one method consistently throughout the contract
when estimating the effect of uncertainty on an amount of variable
consideration to which the entity will be entitled.
Factors that would increase the likelihood or magnitude of a revenue reversal
The amount of The uncertainty The entitys The entity has a The contract has
consideration is about the experience (or practice of a large number
highly amount of other evidence) either offering a and broad range
susceptible to consideration is with similar broad range of of possible
factors outside not expected to types of price consideration
the entitys be resolved for contracts is concessions or amounts.
influence. a long period of limited or has changing the
time. limited payment terms
predictive and conditions
value. of similar
contracts in
similar
circumstances.
The existence of significant financing component
The objective when adjusting the promised amount of consideration for a significant
financing component is for an entity to recognize revenue at an amount that reflects
that price that would have been paid if the customer would have paid cash.
An entity need not adjust if the period between the transfer of promised good or
service to customer and payment will be one year or less.
An entity shall present the effects of financing (interest revenue or interest expense
separately from revenue in the statement of comprehensive income.
TRANSACTION PRICE (REVENUE IS CONSTRAINED)
On May 1,2017 QRS Construction Company, entered into a contract to construct a commercial building for a customer on a customers property
for a consideration of P7,500,000 and a bonus of P1,500,000 if the building is completed within 24 months. On the inception date, the entity
expects total construction cost of P5,250,000 to complete the building. The entity accounts for the promised bundle of goods and services as a
single performance obligation satisfied over time in accordance with IFRS 15 because the customer controls the asset it is created or enhance.
at contract inception, the entity cannot conclude that it is highly probable that a significant reversal in the amount of cumulative revenue
recognized will not occur with respect to inclusion of bonus to contract price. Completion of the building is highly susceptible to factors outside
the entitys influence including weather and regulatory approvals. In addition, the entity has limited experience with this similar types of
contracts. The entity determines that the input measure, on the basis of costs incurred provides an Appropriate measure of progress towards
complete satisfaction of the performance obligation. As of December 31,2017, the construction costs incurred to date by QRS Construction
Company is P3,150,000.
in the first quarter of 2018, the parties to the contract agree to modify the contract by changing the design of the building. As a result, the fixed
consideration and expected cost increase by P1,125,000 and P900,000, respectively. In addition, the allowable time for achieving the P1,500,000
bonus is extended by 6 months or to 30 months from the original contract inception date. At the date of modification, on the basis of its
experience and the remaining work to be performed, which is primary inside the building and not subject to weather and conditions, the entity
concludes that it is highly probable that including the bonus the transaction price will not result in a significant reversal in the amount of
cumulative revenue recognized.
Despite the changes, the contractor evaluates that the remaining goods and services to be provided using the modified contract are not distinct
from the goods and services transferred on or before the date of contract modification; that is, the contract remains a single performance
obligation. For the year ended December 31, 2018, QRS Company incurred the transaction cost of P1,462,500.
Compute the balance of construction in progress as of December 31,2018 and realized gross profit to be recognized by QRS Company for
the year ended December 31,2018?
ESTIMATING OF VARIABLE CONSODERATION
XYZ Corporation enters into a contract with a customer to build a warehouse for P5,000,000 with a
performance bonus of P2,500,000 that will be paid base on the timing of completion. The amount of
the performance bonus decreases by 10% per week for every week beyond the agreed upon
completion date. The contract requirements are similar to contract that XYZ has performed
previously, and a management believes that such experience is predictive to contract. Management
estimates that there is a 60% probability that the contract will be completed by the agreed upon
completion date, a 30% probability that it will be completed 1 week late, and only a 10% probability
that it will be completed 2 weeks late.
Compute for the total transaction price.

ESTIMATING OF VARIABLE CONSODERATION AND CONSIDERING THE EFFECT OF THE
CONSTRAINT
Entity X provides transportation to botanical garden customers to and from accommodation in the
area under a 1 year agreement. It is required to provide scheduled transportation throughout the
year for a fixed fee of P50,000 annually. Entity X also is entitled to performance bonuses for on-
time performance and average customer at times. Its performance may yield a bonus from 0 to
75,000 under the contract. Based on the history of the botanical garden, customer travel patterns
and its current expectations, Entity X estimates the probabilities for different amounts of bonus
within the range as follows:
Bonus Probability Outcome

0 20%
P25,000 25%
P50,000 15%
P75,000 40%
Compute for the total transaction price using the expected value and using most likely
amount.
TRANSACTION PRICE- VOLUME DISCOUNT
DEF Company offers its customers a 3% volume discount if they purchase at least
P4,000,000 of its product during the calendar year. On March 31,2017, DEF has made sales
of P1,400,000 to JKL Company. In the previous 2 years, DEF sold over P6,000,000 to JKL
Company in the period April 1 to Dec 31.
How much revenue should DEF recognized for the first 3 months of 2017?
Prepare the journal entry assuming that DEFs customer meets the discount threshold.
Prepare the journal entry assuming that DEFs customer fails to meet the discount.
obligation contracts
The objective of allocation is to allocate the transaction price to each performance

obligation in an amount that depicts the consideration to which the entity expects to be
entitled in exchange for transferring the promised goods or services.
An entity shall allocate the transaction price to each performance obligation identified in
the contract on a relative stand alone selling price basis except for allocating discounts
and consideration that includes variable amounts.
ALLOCATION BASED ON THE STAND-ALONE SELLING PRICE
OBSERVABLE PRICE AVAILABLE
USE ESTIMATED PRICE
USE THE OBSERVABLE PRICE

Adjusted market
assessment approach
Expected cost plus a
margin approach
Residual approach
Changes in Transaction Price
An entity shall allocate the performance obligations in the contract

any subsequent changes in the transaction price on the same basis as
a contract inception.
An entity shall account for a change in the transaction price that
arises from contract modification based on the contract modification
guidance.
CONTRACT MODIFICATION
A contract modification is a change in the scope or price (or both) of a contract that is
approved by the parties to the contract.
A contract modification is accounted for as a separate contract if both of the following
conditions are present:
The scope of the The price of the contract increases by an

contract increases amount of consideration that reflects the
because of the AND entitys stand-alone selling prices of the
addition of promised additional promised goods or services and any
goods or services that appropriate adjustments to that price to
are distinct reflect the circumstances of the contract
CONTRACT MODIFICATION
If a contract modification is not accounted for as separate contract, an entity shall

account for the promised goods or services not yet transferred at the date of the contract
modification in whichever of the following ways:
A. as if it was a termination of the existing contract and a creation of a new one, if the
remaining goods or services are distinct from the goods or services transferred on or
before the date of contract modification
B. As if it was a part of the existing contract if the remaining goods or services are not
distinct and therefore, form part of a single performance obligation (cumulative catch up)
c. If the remaining goods or services are a combination of items (a) and (b), then account
for the effects of the modification on the unsatisfied performance obligations in the
modified contract in a manner that is consistent with the objectives of this paragraph.
MULTIPLE CONTRACT OBLIGATION
ABC Company is an experienced manufacturer of equipment use in the construction industry. ABCs products range from the small to
large individual pieces of automated machinery to complex systems containing numerous components. Unit selling prices range from
P1,200,000 to P8,000,000 and are quoted inclusive of installation and training. The installation process does not involve changes to
the features of the equipment and does not require proprietary information about the equipment in order for installed equipment to
perform to specifications. ABC has the following arrangements with KLM Company:
KLM purchase equipment from ABC for a price of P4,000,000 and chooses ABC to do installation. ABC charges the same price for the
equipment irrespective of whether it dies the installation or not. (Some companies do the installation themselves because they either
prefer their own employees to do the work because of relationships with other customers.) the price of the installation service is
estimated to have a fair value of P40,000.
The fair value of the training sessions is estimated at P100,000, other companies can also perform these training services. KLM is
obliged to pay ABC the P4,000,000 upon the delivery and installation of the equipment.
ABC delivers the equipment and completes the installation of the equipment on November 01, 2017. training related to the
equipment starts once the installation is completed and lasts for 1 year. The equipment has a useful life of 10 years. The equipment
has a costs of P3,000,000.
What are the performance obligations for purposes of accounting for the sale of equipment?
If there is more than 1 performance obligation, how should the payment of P4,000,000 be allocated to various components?
CONTRACT MODIFICATIONS- DINSTINCT AND STAND ALONE SELLING PRICE
WYX Company has a contract to sell 300 products to a customer for P30,000 at various points
in time over a six-month period. After 180 products have been delivered, WYX modifies the
contract by promising to deliver 60 more products for an additional P5,700. WYX regularly
sells the products separately.
How will the additional 60 products affect the accounting for the original contract?
How much is the total revenue after the modification?

What if the additional products are not priced at the proper standalone selling price or
if they are not distinct- how will the answer (a) and (b) change?
Step 5: Recognize revenue when (or as) the entity satisfies
performance obligation
An entity shall recognize revenue when (or as)

the entity satisfies a performance obligation by
transferring a promised good or service (i.e. an
asset) to a customer. An asset is transferred
when (or as) the customer obtains control of
that asset.
Performance obligations satisfied at a point in time
Control of an Asset
Ability to direct the Includes the ability to

use of, and obtain prevent other entities from
substantially all of directing the use of, and
the remaining obtaining the benefits from
benefits from the an asset
asset
An entity shall also consider in evaluating control any agreement to repurchase the asset
Performance obligations satisfied at a point in time
Indicators of transfer of control
The entity has The customer The entity The customer The customer
a present has a legal has has a significant has accepted
right to title to the transferre risk and rewards the asset
payment for asset d physical of ownership of
the asset possession the asset
of the
asset
Performance obligations satisfied over time
An entity transfers control of a good service over time and, therefore,

satisfies a performance obligation and recognizes revenue over time, if
one of the following criteria is met
The customer The entitys The entitys performance does

simultaneously receives performance not create an asset with an
and consumes the creates or alternative use to the entity
or or
benefits provided by the enhances an and the entity has an
entitys performance as asset that the enforceable right to payment
the entity performs. customers for the performance completed
controls as the to date
asset created
or enhance
Measuring progress towards complete satisfaction of a performance obligation
Methods for measuring progress
OUTPUT METHOD
The most faithful depiction of an entitys performance of there is no preferable measure of
progress.
Directly measures the value of the goods and services transferred to the customer
INPUT METHOD
Recognize revenue based on an entitys efforts or inputs towards satisfying a performance
obligation relative to the total expected efforts or inputs to satisfy the performance obligation
Measuring progress towards complete satisfaction of a performance obligation
Single Method of measuring progress of each performance obligation satisfied

over time an shall be applied consistently to similar performance obligations
and in similar circumstances
As circumstances change over time, an entity shall update the its measure of
progress to reflect any changes in the outcome of the performance obligation
Such changes shall be accounted for as a change in accounting estimate.
CONTRACT ASSETS- CONDITIONAL RIGHTS TO RECEIVE CONSIDERATION
On January 1, 2017, EFG Company enters into a contract to transfer Product B to HIJ Company for
P500,000. The contract specifies that payment of product A will not occur until Product B is also
delivered. In other words, payment will not occur until both Product A an Bare transferred to HIJ. EFG
determines that standalone prices are P150,000 and P350,000 for Product B. EFG delivers the Product A
to HIJ on February 1,2017. On March 1,2017 EFG delivers Product B to EFG.
What journal entries should EFG Company make in regards to this contract in 2017?
CONTRACT LIABILITY- UNEARNED SALES REVENUE
On March 1, 2017,NOP Company enters into a contract to transfer product to RST Inc. On July 31,2017. It
is Agreed that RST will pay the full price of P60,000 in advance on April 1,2017. the contract is non-
cancellabe. RST however does not pay until April 15, 2017, and NOP delivers the product on July 31,
2017. the cost of the product is P45,000.
What is the journal entries should NOP Company make in regards to this contract in 2017?
REVENUE RECOGNITION FOR FRANCHISES (AT POINT IN TIME VS. OVER A PERIOD OF TIME.
EFG operates and franchises restaurants around the world. On January 1,2017, EFG entered into a franchise agreement
with a franchisee. As part of its franchise agreement, EFG requires the franchisee to pay non refundable upfront franchise
fee of P570,000 upon opening a restaurant and on going payment of royalties, based on 10% of franchisees sales. As part
of the franchise agreement, EFG provides pre-operating services, including supply installation of cooking equipment and
cash registers, valued at P180,000, which is the stand alone selling price of the pre opening services.
In addition the franchisee agreement includes a license of intellectual property such as EFGs trademark and trade name
to the franchisee. EFG has determined that the license provides a right to access the intellectual property over time. EFG
has determined the standalone selling price of the license is P420,000.
The franchise agreement has a term of 10 years. On January 1,2017, the franchisee paid the non refundable upfront
franchise fee of P570,000 to EFG. The franchisor evaluates the arrangement and determines it meets the criteria to be
accounted for as a contract with a customer under IFRS 15. EFG determines its pre-opening services and license of
intellectual property are each distinct and, therefore, need to be accounted for a separate performance obligations. As of
December 31,2017, EFG already satisfied its performance obligation to supply and install cooking equipment and cash
register to the franchisee. For the year ended December 31,2017, the franchisee reported sales revenue of P600,000.
Compute for the total revenue shall be recognized by EFG for the year ended December 31,2017?
RECOGNITION OVER TIME
In each of the following cases, identify the criteria in recognizing revenue over time
CASE A. XYZ Co. enters into a contract to provide weekly cleaning services to a customer for 2
years. The promised cleaning services are accounted for as a single performance obligation.
Another entity would not need to re-perform the cleaning services that XYZ Co. has provided
to date.
CASE B. ABC Co. enters into an agreement to build integrated IT System that interfaces sales,
procurement and accounting functions. ABC Co. is expected to take one year to complete the
work. During the development of the integrated system, ABC Co. works extensively with the
customer to design and configure the system as well as to run tests to check its operability.
CASE C. HIJ Co. enters into a contract to construct a highly customized piece of equipment
subject to specifications provided by the customer. If the customer were to terminate the
contract for reasons other than HIJs failure to perform as promised, the contract requires the
customer to compensate HIJ Co. for its cost incurred plus a 10% margin. The contract also
contain an enforceable restriction to HIJs ability to direct the equipment for another use.
OTHER REVENUE RECOGNITION ISSUES
OTHER REVENUE RECOGNITION ISSUES- RIGHT OF RETURN
ABC Company sells 400 products for P100 each to XYZ Company for cash. ABC allows XYZ to
return any product which unused or because of dissatisfaction within 30 days and receive a
full refund. The cost of each product is P60. to determine the transaction price, ABC decides
that the approach that is most predictive of the amount of consideration to which it will be
entitled is the most likely amount.
Using the most likely amount, ABC estimates that:
Twelve products will be returned.

The costs of recovering the products will be immaterial
The returned products are expected to be resold at a profit
How should ABC Record this sale?

Prepare journal entry when a return occurs.
OTHER REVENUE RECOGNITION ISSUES- REPURCHASE AGREEMENT
QRS Inc., an equipment dealer, sells equipment on January 1,2017, to HIJ Company for
P200,000. it agrees to repurchase this equipment from HIJ Company on December 31,2018,
for a price of P242,000. Assuming interest rate of 10% is imputed from the agreement.
Should QRS Inc., record a sale for this transaction?

Prepare a journal entries on January 1,2017, December 31, 2017 and 2018
OTHER REVENUE RECOGNITION ISSUES- BILL AND HOLD ARRANGEMENT
FGH Company sells P900,000 with costs of P560,000 of the fire places on March 1,
2017 to a local coffee shop, LMN, which is planning to expand its locations around
the city. Under the agreement, LMN asks FGH to retain these fire places in its
warehouses until the new coffee shops that will house the fire place are ready.
Title passes to LMN at the time the agreement is signed.
When should FGH recognize the revenue from this bill-and-hold arrangement?
Prepare the necessary journal entry (if any) on March 1,2017.
OTHER REVENUE RECOGNITION ISSUES- CONSIGNMENTS
CASE A. ABC Manufacturing Company ships merchandise costing P72,000 on consignment to XYZ stores.
ABC pays P7,500 of freight costs, and XYZ pays P4,500 for local advertising costs that are reimbursable
from ABC. By the end of the period, XYZ has sold 2/3 of the consigned merchandise for P80,000 cash.
XYZ notifies ABC of the sales, retains 10%commission, and remits the cash due to ABC.
What are the journal entries that the consignor and the consignee make to record this
transaction?
CASE B. ABC Company consigned five tablets with cost of P16,000 each to XYZ Company. The tablets
were to be sold on either cash or credit basis to a commission of 15% of selling price. The ABC
Company paid shipping costs of P4,000 on the shipment. Correspondingly, XYZ Company paid P6,400 on
the freight of the shipment. On the last day of the year, XYZ Company reported that it had sold three
of the tablets, two for cash at P30,000 each and one on credit at P36,000, of which 25% was collected
as down payment. XYZ Company remitted all the cash due.
The amount of cash remitted by XYZ Company?

the consignment profit is??

IFRS 15 Revenue Guide

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IFRS 15

REVENUE FROM CONTRACTS WITH CUSTOMERS

Step 1: Identify the contract(s) with customer

Step 2: Identify the performance of obligations in the

Step 3: Determine the Transaction price

Step 4: Allocate the transaction price to performance

Step 5: Recognize revenue when (or as) the entity

A contract is an agreement between two or more

A performance obligation is a promise to transfer to the customer either:

A good or service (or a A series of distinct goods or services that

Includes implied promises which do not need to be enforceable by law.

Each distinct good or The same method would be

The customer can be The entitys promise to

Constraining estimates of variable consideration: amount of variable consideration estimated

Methods in estimating the amount of variable consideration:

Expected value: the sum of probability-weighted amounts in range of possible

Compute for the total transaction price.

Bonus Probability Outcome

The objective of allocation is to allocate the transaction price to each performance

OBSERVABLE PRICE AVAILABLE

USE ESTIMATED PRICE

USE THE OBSERVABLE PRICE

An entity shall allocate the performance obligations in the contract

The scope of the The price of the contract increases by an

If a contract modification is not accounted for as separate contract, an entity shall

How much is the total revenue after the modification?

An entity shall recognize revenue when (or as)

Ability to direct the Includes the ability to

Indicators of transfer of control

An entity transfers control of a good service over time and, therefore,

The customer The entitys The entitys performance does

Measuring progress towards complete satisfaction of a performance obligation

Methods for measuring progress

Measuring progress towards complete satisfaction of a performance obligation

Single Method of measuring progress of each performance obligation satisfied

CONTRACT LIABILITY- UNEARNED SALES REVENUE

Using the most likely amount, ABC estimates that:

Twelve products will be returned.

How should ABC Record this sale?

Should QRS Inc., record a sale for this transaction?

The amount of cash remitted by XYZ Company?

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