Revenue recognition IFRS

Question 1

sale of goods

Answer 1

revenue from sale of goods recognized when ALL of the following conditions are met

a) revenue and costs can be measure reliably
b) probable that the economic benefits from the transaction will flow to the entity
c) transfer of ownership of risks and rewards
d) no management involvement regarding ownership of those goods

Question 2

Rendering of services

Answer 2

% of completion method is used

a) revenue and costs can be measure reliably
b) probable that the economic benefits from the transaction will flow to the entity
c) when the stage of completion of the transaction at the end of the reporting period can be mesaured reliably

Question 3

Revenue from interest, royalty, dividends

Answer 3

Use of money, patents, etc.

a) revenue and costs can be measure reliably
b) probable that the economic benefits from the transaction will flow to the entity

dividends are recognized when the shareholders’ rights to receive payment are established

Question 4

Construction contracts

Answer 4

outcome of the construction contract can be estimated when ALL have met:

a) revenue and costs can be measure reliably
b) probable that the economic benefits from the transaction will flow to the entity
c) costs to complete the contract and stage of contract completion can be measured reliably