IFRS-15

Question 1

Construction of playgrounds at 16 sites, customer pay 25% deposits on signing contract.

Answer 1

According to the IFRS-15:
25% of revenue- recognize as deferred income, or contract liability-in current liabilities
Performance obligation satisfied-Revenue recognize-(which time ath ezutha)
overstatement of revenue ,understatement of current labilities

Disucss with mgt criteria for determining-performance obligaiton satisfied
Discuss the treatment of deposits-consistent with relevant standard
Increase testing over cut off revenue
completeness of deferrd income

Question 2

Finance director -reduces the estimated return rate for goods sold-on a sale or return basis
from 10%-5%

Answer 2

According to the IFRS-15:
Revenue & COS only recognise-to the extend -compnay forsees goods will not be retuned
For -goods retunrning-refund laibilty
After 60 days-not returned-liability reverse-revenue recognized

Discuss the rationale and assumption behind the changes from 10%-5%
Review -60 days-compare the levels of return to new assumed rate 5%
Discuss-variations-FD