Revenue

Question 1

IFRS15 defines revenue as

Answer 1

income arising in the course of an entity’s normal activities

Question 2

importance of revenue in the fs

Answer 2

it provides users with an idea about the financial performance and position of a company

Question 3

purpose of IFRS15

Answer 3

to establish principles that an entity should apply to report on the useful information within the fs that concern ‘the nature, amount, timing, and uncertainty of revenue and cash flows that have arisen from a contract with a customer’

Question 4

the 5 step model of IFRS15

Answer 4

is designed to achieve the core principles

Question 5

the 5 steps are as followed

Answer 5

1. identify a contract with a customer
2. identify the performance obligations within the contract
3. determine the transaction price
4. allocate the transaction price to the performance obligations in the contract
5. recognise revenue when or as the entity satisfies the performance obligation