I made it foot locker military discount policy really simple for you here, so lets do it in the following table: Performance obligation Stand-alone selling price on total Revenue (relative selling price 1 200 Handset 300.00.8 285.60 Network services 960.00 (80*12).2 914.40 Total 1 260.00 100.0 1 200.00.
For the simplicity, lets assume that ABC recognizes no revenue from the sale of handset, because ABC gives it away for free.
A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.Well, because some contracts surpass one accounting period.Johnny receives a free handset at the inception of the plan.Thank you for showing interest in this item.What does it mean?When you apply ifrs 15, you need to apply it as the new rules have always been in place, that is retrospectively.This is a certain form of a residual method (based on US gaaps cash cap method).However, IAS 18 does not give any guidance on how to identify these components and how to allocate selling price and as a result, there were different practices applied.Revenue under ifrs 15 Under new rules in ifrs 15, ABC needs to identify the contract first (step 1), which is obvious here as theres a clear 12-month plan with Johnny.The journal entries are summarized in the following table: Description Amount Debit Credit When 285.60 FP Unbilled revenue P/L Revenue from sale of goods When handset is given to Johnny Network services 100.00 ( monthly billing to Johnny) FP Receivable to Johnny When network services.The transaction price is the amount of consideration (for example, payment) to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.Its practical to do it once per month as the billing happens.Step 4: Allocate the transaction price to the performance obligations in the contract.Opposed to ifrs, US gaap guidance about revenues is very detailed.How many contracts are there?Whats the Impact of the ifrs 15?Just imagine you work in a construction of real estate and youre affected by ifrs.Its a full ifrs learning package with more than 40 hours of private video tutorials, more than 140 ifrs case studies solved in Excel, more than 180 pages of handouts and many bonuses included.We won't share your email with anybody.It means that if the operator gives a handset for free with the prepayment plan, then the revenue from handset.
Ifric 18 Transfer of Assets from Customers.
Ifric 13 Customer Loyalty Programs, ifric 15 Agreements for the Construction of Real Estate and.

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