chapter 13 - revenue

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• What is a contract asset? What is the difference to a receivable? Goods/services have been delivered to the customer, but not yet invoiced (and becoming a customer receivable)
• How should the revenue be calculated if the customer is granted the right to return the products? The company should estimate the expected return and only recognize the amount which it expects
• What is a stand-alone selling price and how does it affect the accounting? If the performance obligations (like product, services) in a contract were to be sold separately the revenue must be allocated to each performance obligation
• Why is it important to identify the performance obligation? It is important because the revenue arising from each obligation is calculated separately
• If the consideration for a contract may vary because of refunds or performance bonuses, how should the revenue be measured? It must be estimated (and deducted from revenue) when revenue is recognized
• Is a building contract a performance obligation that is satisfied over time or at a point in time? If the customer has control over the asset, the revenue at the builder will be recognized over time (for example using the percentage of completion method)
• What is included in the five-step model? Determine the transaction price, identify a performance obligation, allocate the price to performance obligations. Calculate a possible credit loss in the contract is not included
• Define a contract liability. If the payment is made by the customer before the delivering company has transferred goods/services
• If the transaction includes a warranty, how should that be accounted for? As a simultaneous cost in accordance with IAS37/provision
• When identifying the revenue contract, what does the standard say about the payment? It is probable the company will collect the cash

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