2:13 online.uts.edu.au vodafone AU Exercise 15.10 evenue recognition rendering o
ID: 2547560 • Letter: 2
Question
2:13 online.uts.edu.au vodafone AU Exercise 15.10 evenue recognition rendering of services In each of the following situations, state at which date(s), itf any, revenue will be recognised A contract for the rendering of services is entered into on 1 May 2020. The services are delivered on 15 May 2020. The buyer pays for the services on 30 May 2020 2.A contract for the rendering of services is entered into on May 2020. The services are delivered continuously over a 1-year period commencing on 15 May 2020. The buyer pays for all the services on 30 May 2020 3. A contract for the rendering of services is entered into on May 2020. The services are delivered continuously over a 1-year period commencing on 15 May 2020. The buyer pays for the services on a monthly basis, commencing on 15 May 2020. 4.Whalenado Ltd is an insurance agent and provides insurance advisory services to Customer B. Whalenado Ltd receives a commission from insurance company Ibis Ltd when Whalenado Ltd places Customer B's insurance policy wit Whalenado Ltd has no further obligation to provide services to Customer B. h Ibis Ltd, on 1 April 2020. 5.Whalenado Ltd is an insurance agent and provides insurance advisory services to Customer B. Whalenado Ltd receives a commission from insurance company Ibis Ltd when Whalenado Ltd places Customer B's insurance policy with Ibis Ltd, on April 2020. Whalenado Ltd is required to provide ongoing services to Customer B until 1 April 2021. Additional amounts are charged for these services. All amounts are at market rates. Crabapple Ltd receives a non-refundable upfront fee from Customer B for investment advice, on 1 March 2020. Under the agreement with Customer B Crabapple Ltd must provide ongoing management services unti 1 March 2021. An additional amount is charged for these services. The upfront fee is higher than the market rate for equivalent initial investment advice services. 6.Explanation / Answer
Revenue recognistion - Rendering of Services
Revenue is recognised when performance obligation contained the contact is satified by rendering an agreed services to a customer. It happend when Customer obtains full control of that services. Performance obligation is satisfied at a point in time or over a period of time.
Answer to Question no 1
Revenue will be recognised on 15 May 2020
Answer to Question no 2
Revenue will be recognised over a period of time commencing from 15 May 2020
Answer to Question no 3
Revenue will be recognised over a period of time commencing from 15 May 2020
Answer to Question no 4
Revenue will be recognised on 01 April 2020
Answer to Question no 5
Initial revenue will be recognised on 01 April 2020 (as a sale of insurance policy)
Additional reveue will be recognised as and when services are provided until 01 April 2021 (Here, these additional services are chargeable at market rates)
Answer to Question no 6
Revenue will be recognised as and when services are rendered on straight line method over a period of 12 months commencing from 1 March 2020. (Here services will be rendered until 1 March 2021)
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