Revenue from Contracts with

Customers

BFRS 15

Membership and Association: Member of Council of ICAB (Highest Governing Body) Ex Member of Dhaka Regional Committee of ICAB Member of Institute of Internal Auditors - Bangladesh Life member of Gulshan North Club Life member of Banani Society Member Gulshan Health Club Active Rotarian.

As part of professional development programmers, Mr. Mahamud participated in large number of

training programs, seminars and workshops in the area of Financial Planning, Business

Integration, Merger & Takeover and Leadership & Change Management & IFRS in Singapore,

Thailand, India, Sri Lanka, Malaysia, UK and Indonesia etc.

Mr. Mahamud conducted a number oftraining programs on IFRS, ContemporaryAssurances & Corporate Reporting issues,Leadership & Business PerformanceEvaluation for participant from variousleading MNCs and local conglomerates,Bangladesh Bank, National Board of Revenue& University Teachers. As a visiting resourceperson, he also taught in some of the leadingbusiness schools/Institute (ICAB/NationalUniversity).

Mahamud Hosain FCA is business graduate, fellow member of the Institute ofChartered Accountants of Bangladesh [ICAB] and has diversified experience ofabove 13 years in financial planning, financial system & control design, advisoryservices in business integration & transition and project management

Paper Presenter

Revenue recognition and measurement is crucial to reporting financial

performance. In recent years, different entities operating within the same

business sector have adopted varying practices for revenue recognition,

which has led to marked variations in the timing and measurement of

revenue and hence profit. Aggressive earnings management policies have

resulted in questionable revenue recognition practices

An effective and credible accounting standard on revenue isessential to ensure capital market confidence in corporatereporting, which is the purpose of this standards.

BFRS 15 ….. Business Context & background

Mahamud Hosain FCA

- provides a single, principles based five-step model ;

Specific & improved guidelines of BFRS 15

- guide how and when an entity shall recognise revenue;

- require more informative, relevant disclosures.

- Methodical approach (similar to FASB Guidelines)

Mahamud Hosain FCA

However, Application of this guidance will depend on the facts

and circumstances present in a contract with a customer and

will require the exercise of judgment.

BFRS 15’s core principle is: an entity will recognise revenueto depict-

To establish principle based guidelines:-

- the transfer of promised goods or services to customersin an amount

-that reflects the consideration to which the entityexpects to be entitled in exchange for those goods orservices.

An entity shall consider the terms of thecontract and all relevant facts andcircumstances when applying this Standard

Mahamud Hosain FCA

The IASB and the FASB achieved their goal of reaching the sameconclusions on all requirements for the accounting for revenuefrom contracts with customers.

As a result, BFRS 15 and Topic 606 are substantially the same.However, there are some minor differences which are outlinedin the appendix to the Basis for Conclusions.

Overview of BFRS 15

Convergence & Integration among IASB’s pronouncement

This standard summarizes the revenue recognition in single standard in place of BAS 11, BAS 18, SIC 31, IFRIC 13, IFRIC 15 & IFRIC 18

facilitates convergence with FASB GAAP/Pronouncement

Mahamud Hosain FCA

to

all contracts with customers

Except:BAS 17 Leases;

financial instruments and other contractual rights orobligations within the scope of BFRS 9

BFRS 10 Consolidated Financial Statements,

BFRS 11 Joint Arrangements,

BAS 27 Separate Financial Statements,

BAS 28 Investments in Associates and Joint Ventures;

insurance contracts within the scope of BFRS 4; and

non-monetary exchanges between entities in the same line ofbusiness to facilitate sales to customers or potentialcustomers

Scope_An entity shall apply this Standard

Mahamud Hosain FCA

Application/scope

Counterparty contract

Mahamud Hosain FCA

Contract scope in another standards

Mahamud Hosain FCA

Contract scope in another standards

Mahamud Hosain FCA

Incremental costs of obtaining a contract

Mahamud Hosain FCA

Definition…

Contract liabilityAn entity’s obligation to transfer goods or services to a customer for which theentity has received consideration (or the amount is due) from the customer.

Contract assetAn entity’s right to consideration in exchange for goods or services that theentity has transferred to a customer when that right is conditioned on somethingother than the passage of time (for example, the entity’s future performance).

Customer : A party that has contracted with an entity to obtain goods orservices that are an output of the entity’s ordinary activities in exchangefor consideration.

Contract: An agreement between two or more parties thatcreates enforceable rights and obligations.

Mahamud Hosain FCA

Definition…

Stand-alone selling price (of a good or service)The price at which an entity would sell a promised good or service separately to a customer

Transaction priceThe amount of consideration to which an entity expects to be entitled in exchange fortransferring promised goods or services to a customer, excluding amounts collected on behalfof third parties.

Performance obligationA promise in a contract with a customer to transfer to the customer either:• a good or service (or a bundle of goods or services) that is distinct; or• a series of distinct goods or services that are substantially the same and that have the

same pattern of transfer to the customer.

Mahamud Hosain FCA

Major Changes from Earlier Standards

Current Requirements New Requirements

BAS 11: Construction ContractsBAS 18: Sales of GoodsBAS 18: Sales of ServicesIFRIC 15 : Real Estate Sales

BFRS 15: Revenue from Customer Contracts

Over time or at a point in time

BAS 18: RoyaltiesBFRS 15: New guidelines on royalties revenue

IFRIC 13: Customer Loyalties Program BFRS 15 New guidelines with option of additional goods/services & breakageIFRIC 18 : Transfer of Assets from

CustomerSIC 31 : Advertising Barter Transactions

BFRS 15: Guidance on non cash considerations

Previously less guidelines on cost of obtaining and fulfilling a contract

BFRS 15: New guidance on cost of obtaining and fulfilling a contract

BAS 18: InterestBAS 18: Dividend

BAS 39: InterestBFRS 9: Dividend

Mahamud Hosain FCA

Major Changes from Earlier Standards

Current Definition New Definition

Revenue defined as

The gross inflow of economic

benefits during the period

arising in the course of the

ordinary activities of an entity

when those inflows result in

increases in equity, other than

increases relating to

contributions from equity

participants. [BAS 18 (7)]

Income arising in the course of an entity’s ordinary activities

Income is defined as increases

in economic benefits during the

accounting period in the form of

inflows or enhancements of

assets or decreases of liabilities

that result in increases in

equity, other than those relating

to contributions from equityparticipants.

Mahamud Hosain FCA

BFRS 15 …..replace/supersedes

BFRS 15 replaces/supersedes the following

standards and interpretations:

BAS 11 Construction Contracts [1979]

BAS 18 Revenue [1982]

IFRIC 13 Customer Loyalty Programmes

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 18 Transfers of Assets from Customers

SIC 31 Revenue - Barter Transactions Involving Advertising Services,

Mahamud Hosain FCA

Background of BFRS 15

In order to address the concern/gap (risen time to time), specific guidelinesthrough SIC & IFRIC were issued.

All the superseded standards cover their own areas & were revised subsequently.

IASB (and its predecessor) had relentlessly employed efforts to prescribeproper accounting treatments in these areas. There was understood gapwith related GAAP issued by FASB.

After long time & due course of study of different accountingpronouncements/GAAP issued by various national/international standardssetter/regulatory guidelines applied in different political boundary,knowledge sharing with different standards setters across the globe,inviting & consideration of comments from interested group, meeting withexpert group/researcher, IASB has finally issued BFRS 15 in May 2014.

Finally IASB has undertaken project to bring convergence with FASBpronouncement/GAAP & integrate different standards in June 2002.

Mahamud Hosain FCA

Rationale for issuance of BFRS 15…..[in4]

Revenue is a crucial number to users of the financial statements inassessing a company’s performance and prospects.

However, previous revenue recognition requirements in Bangladesh (International)Financial Reporting Standards (BFRS) differed from those in US GenerallyAccepted Accounting Principles (US GAAP) and both sets of requirements were inneed of improvement

Previous revenue recognition requirements in BFRS (BFRS 18 & BAS 11) provided limited guidance and, consequently, the two main revenue recognition Standards, BAS 18 and BAS 11,

could be difficult to apply to complex transactions. In addition, BAS 18 provided limited guidance on many important revenue

topics such as accounting for multiple-element arrangements.In contrast, US GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or

transactions, which sometimes resulted in different accounting for economicallysimilar transactions.

Mahamud Hosain FCA

Rationale for issuance of BFRS 15…..

Hence convergence was very necessary and pursued to achieve through issuance ofnew standards

Accordingly, the International Accounting Standards Board (IASB) and the USnational standard-setter, the Financial Accounting Standards Board (FASB),initiated a joint project to clarify the principles for recognising revenue and todevelop a common revenue standard for BFRS and US GAAP that would:

remove inconsistencies and weaknesses in previous revenue requirements;

provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities,

industries, jurisdictions and capital markets; provide more useful information to users of financial statements through

improved disclosure requirements; and simplify the preparation of financial statements by reducing the number of

requirements to which an entity must refer.

Mahamud Hosain FCA

the nature;

the amount;

uncertainty of revenue; and

cash flows arising from a contract with a customer.[employs significant emphasis on cash flow]

Value addition of BFRS 15 for disclosures..

It establishes the principles that an entity shall apply to report useful information to users of financial statements about :-

IASB has made clear cut guidelines in respect ofcoverage by another standards

Timing;

Mahamud Hosain FCA

Identify the contract(s) with a customer

Identify the performance obligations in the contract

Determine the transaction price (Amount)

Allocate the transaction price to the performance obligations in the contract (How much)

Recognise revenue when (or as) the entity satisfies a performance obligation

Five steps model….

Step 1

Step 2

Step 3

Step 4

Step 5

Mahamud Hosain FCA

the contract has been approved by the parties to the contract

the contract has commercial substance [(ie the risk, timing]

it is probable that consideration is collectible

Step 1

the payment terms for the goods or services to betransferred can be identified :Definite

Identify the contract with the customer

An entity shall account for a contract with a customer only whenall of the following criteria are met:-

each party’s rights in relation to the goods or services whichto be transferred can be identified: Definite

Mahamud Hosain FCA

Collectability

Mahamud Hosain FCA

Unilateral enforceable right to terminate

Mahamud Hosain FCA

Subsequent continuous review

Mahamud Hosain FCA

When to recognize advance as revenue

Mahamud Hosain FCA

When to combine contract

Mahamud Hosain FCA

Modification of contract

Mahamud Hosain FCA

a good or service (or a bundle of goods or services)that is distinct; or

Step 2

a series of distinct goods or services that aresubstantially the same and that have the samepattern of transfer to the customer

Identifying performance obligations

At contract inception, an entity shall :-(i) assess the goods or services promised in a contract with a

customer; &

(ii) identify as a performance obligation each promise to transfer tothe customer either

Mahamud Hosain FCA

When to consider contract modification as new contract

Mahamud Hosain FCA

each distinct good or service in the series that the entity promises to transfer to the customer to be a performance obligation satisfied over time; and

Same Pattern of Transfer

the same method to measure the entity’s progress towards complete satisfaction of the performance obligation to transfer each distinct good or service

a series of distinct goods or services that have same pattern of transfer to the customer if both of the following criteria are met

Mahamud Hosain FCA

Example

The after-sales support revenue should be deferred and recognised over the next two years and should include a reasonable element of profit. This is often computed by reference to similar contracts. The revenue deferred on the after-sales ontract will be Tk 60,000 (cost and the 20% gross profit on selling price) per annum.

The revenue to be recognised on the handover of the system will be Tk 680,000 (Tk 800,000 – (2 x Tk 60,000))

On the last day of the current accounting period an entity completes thehandover of a new system to a client at an agreed price of Tk 800,000.The price includes after-sales support for the next two years. The cost ofproviding the support is estimated at Tk 48,000 per annum, and theentity earns a gross profit of 20% on support contracts.

Mahamud Hosain FCA

sale of goods produced by an entity (for example, inventory of a manufacturer

resale of goods purchased by an entity (for example, merchandise of a retailer);

performing a contractually agreed-upon task (or tasks) for a customer

resale of rights to goods or services purchased by an entity (for example, a ticket resold byan entity acting as a principal

providing a service of standing ready to provide goods or services or of making goods orservices available for a customer to use as and when the customer decides

providing a service of arranging for another party to transfer goods or services to acustomer

granting rights to goods or services to be provided in the future that a customer can resellor provide to its customer

constructing, manufacturing or developing an asset on behalf of a customer

granting licences

granting options to purchase additional goods or services

Depending on the contract, promised goods or services may include, but are not limited to, the following

Distinct Goods/services

Mahamud Hosain FCA

the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (ie the good or service is capable of being distinct); and

Distinct goods/Services

the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (ie the good or service is distinct within the context of the contract).

goods or services are distinct if both of the following criteria are met

Mahamud Hosain FCA

An asset is transferred when (or as) the customer obtains control of that asset.

Satisfaction of performance obligations

An entity shall recognise revenue when (or as) the entitysatisfies a performance obligation by transferring a promisedgood or service (ie an asset) to a customer

Mahamud Hosain FCA

Control of an asset refers to the ability to direct the use of, andobtain substantially all of the remaining benefits from, theasset. Control includes the ability to prevent other entitiesfrom directing the use of, and obtaining the benefits from, anasset

Performance of Obligation…

Goods and services are assets, even if only momentarily, when they arereceived and used (as in the case of many services).

Mahamud Hosain FCA

using the asset to produce goods or provide services (including public services);

Benefits to derive…

The benefits of an asset are the potential cash flows that can be obtained directly or indirectly in many ways, such as by:

using the asset to enhance the value of other assets

using the asset to settle liabilities or reduce expenses

selling or exchanging the asset

pledging the asset to secure a loan; and

holding the asset

Mahamud Hosain FCA

Performance obligations satisfied over time

the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs

the entity’s performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced

the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date

An entity transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met

Mahamud Hosain FCA

Measuring progress towards complete satisfaction of a performance obligation

The objective when measuring progress is to depict an entity’s performance in transferring control of goods or services promised to a customer

An entity shall apply a single method of measuring progress consistently for each performance obligation satisfied over time

At the end of each reporting period, an entity shall remeasure its progress towards complete satisfaction of a performance obligation satisfied over time

An entity shall recognise revenue over time by measuring the progress towards complete satisfaction of that performance obligation.

Mahamud Hosain FCA

Measuring Method

output methods

input methods

In determining the appropriate method for measuring progress, an entity shall consider the nature of the good or service that the entity promised to transfer to the customer

Appropriate methods of measuring progress include

As circumstances change over time, an entity shall update its measure ofprogress to reflect any changes in the outcome of the performance obligation.Such changes to an entity’s measure of progress shall be accounted for as achange in accounting estimate in accordance with BAS 8 AccountingPolicies, Changes in Accounting Estimates and Errors

Mahamud Hosain FCA

Reasonable measures of progress

An entity shall recognise revenue for a performance obligation satisfied over time only:- if the entity can reasonably measure its progress towards

complete satisfaction of the performance obligation.

Appropriate methods of measuring progress include

In some circumstances (for example, in the early stages of a contract), an entitymay not be able to reasonably measure the outcome of a performanceobligation, but the entity expects to recover the costs incurred in satisfying theperformance obligation.

In those circumstances, the entity shall recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Mahamud Hosain FCA

The transaction price is the amount to which an entity expects to beentitled in exchange for the transfer of goods and services. When makingthis determination, an entity will consider past customary businesspractices

Step 3

Where a contract contains elements of variable consideration, theentity will estimate the amount of variable consideration to whichit will be entitled under the contract.

Determine the transaction price

When (or as) a performance obligation is satisfied, an entity shalldetermine the attributable portion of transaction price to recogniserevenue

uncertainty relating to variable consideration shall be taken underconsideration by limiting the amount of variable consideration that can berecognised.

Mahamud Hosain FCA

Estimation of Variable Consideration

The expected value—the expected value is the sum of probability-weightedamounts in a range of possible consideration amounts.

The most likely amount —the most likely amount is the single most likely amount in a range of possible consideration amounts

An entity shall estimate an amount of variable consideration by using either of the following methods, depending on which method the entity expects to better predict the amount of consideration to which it will be entitled

An expected value may be an appropriate estimate of the amount of variableconsideration if an entity has a large number of contracts with similarcharacteristics.

The most likely amount may be an appropriate estimate of the amount of variable consideration if the contract has only two possible outcomes (for example, an entity either achieves a performance bonus or does not).

Mahamud Hosain FCA

Constraining estimates of variable considerationAn entity shall include in the transaction price some or all of an amount ofvariable consideration estimated only to the extent that it is highly probable that asignificant reversal in the amount of cumulative revenue recognised will not occurwhen the uncertainty associated with the variable consideration is subsequentlyresolved

Variable Consideration

Refund liabilities:An entity shall recognise a refund liability if the entity receives consideration from acustomer and expects to refund some or all of that consideration to the customer.A refund liability is measured at the amount of consideration received (orreceivable) for which the entity does not expect to be entitled (ie amounts notincluded in the transaction price).

sales or usage-based royaltyA different, more restrictive approach is applied in respect of sales or usage-based royaltyrevenue arising from licenses of intellectual property. Such revenue is recognized only when theunderlying sales or usage occur. [B63]

Mahamud Hosain FCA

Non-cash considerationTo determine the transaction price for contracts in which a customer promisesconsideration in a form other than cash

Variable Consideration

The existence of a significant financing component in the contractIn determining the transaction price, an entity shall adjust the promisedamount of consideration for the effects of the time value of money if the timing ofpayments agreed to by the parties to the contract (either explicitly orimplicitly) provides the customer or the entity with a significant benefit offinancing the transfer of goods or services to the customer.

Reassessment of variable considerationAt the end of each reporting period, an entity shall update the estimated transaction price(including updating its assessment of whether an estimate of variable consideration isconstrained) to represent faithfully the circumstances present at the end of the reportingperiod and the changes in circumstances during the reporting period

an entity shall measure the non-cash consideration at fair value.

Mahamud Hosain FCA

An entity shall account for consideration payable to a customer as a reduction of the transaction price…..Off Setting

Consideration payable to customer

Consideration payable to a customer also includes credit or other items (for example, a coupon or voucher)

Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer (or to other parties that purchase the entity’s goods or services from the customer).

If the consideration payable to a customer includes a variable amount, an entity shall estimate the transaction price

the entity recognises revenue for the transfer of the related goods or services to the customer; and

the entity pays or promises to pay the consideration. That promise might be implied by the entity’s customary business practices.

If consideration payable to a customer is accounted for as a reduction of the transaction price, an entity shall recognise the reduction of revenue when (or as) the later of either of the following events occurs:-

Mahamud Hosain FCA

To meet the allocation objective, an entity shall allocate the transaction price toeach performance obligation identified in the contract on a relative stand-aloneselling price

Step 4

Allocating the transaction price to performance obligations

when allocating the transaction price it shall be allocated to each performance obligation (ordistinct good or service) in an amount that depicts the amount of consideration to which theentity expects to be entitled in exchange for transferring the promised goods or services to thecustomer

Where consideration is paid in advance or in arrears, the entity will need to considerwhether the contract includes a significant financing arrangement and, if so, adjustfor the time value of money

Mahamud Hosain FCA

The best evidence of a stand-alone selling price is the observable price of a good or service when the entity sells that good or service separately in similar circumstances and to similar customers

Allocation based on stand-alone selling prices

The stand-alone selling price is the price at which an entity would sell a promised good or service separately to a customer

To allocate under this basis; an entity shall determine the stand-alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocate the transaction price in proportion to those stand-alone selling prices.

Adjusted market assessment approach—an entity could evaluate the market in which it sells goods or services and estimate the price that a customer in that market would be willing to pay for those goods or services

Suitable methods for estimating the stand-alone selling price of a good or service include, but are not limited to, the following:-

If a stand-alone selling price is not directly observable, an entity shall estimate the stand-alone selling price

Expected cost plus a margin approach—an entity could forecast its expected costs of satisfying a performance obligation and then add an appropriate margin for that good or service

Residual approach—an entity may estimate the stand-alone selling price by reference to the total transaction price less the sum of the observable stand-alone selling prices of other goods or services promised in the contract

Mahamud Hosain FCA

Allocation of Discount

A customer receives a discount for purchasing a bundle of goods or services if the sum of the stand-alone selling prices of those promised goods or services in the contract exceeds the promised consideration in a contract

the entity regularly sells each distinct good or service (or each bundle of distinct goods or services) in the contract on a stand-alone basis;

An entity shall allocate a discount entirely to one or more, but not all, performance obligations in the contract if all of the following criteria are met:

the entity also regularly sells on a stand-alone basis a bundle (or bundles) of some of those distinct goods or services at a discount to the stand-alone selling prices of the goods or services in each bundle; and

the discount attributable to each bundle of goods or services is substantially the same as the discount in the contract and an analysis of the goods or services in each bundle provides observable evidence of the performance obligation

Mahamud Hosain FCA

one or more, but not all, distinct goods or services promised in a series of distinct goods or services that forms part of a single performance obligation in accordance with paragraph

Allocation of Variable Consideration

one or more, but not all, performance obligations in the contract (for example, a bonus may be contingent on an entity transferring a promised good or service within a specified period of time); or

the terms of a variable payment relate specifically to the entity’s efforts to satisfy the performance obligation or transfer the distinct good or service (or to a specific outcome from satisfying the performance obligation or transferring the distinct good or service); and

An entity shall allocate a variable amount entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation if both of the following criteria are met:

Variable consideration that is promised in a contract may be attributable to the entire contract or to a specific part of the contract, such as either of the following

allocating the variable amount of consideration entirely to the performance obligation or the distinct good or service is consistent with the allocation objective considering all of the performance obligations and payment terms in the contract.

Mahamud Hosain FCA

An entity shall allocate to the performance obligations in the contract any subsequent changes in the transaction price on the same basis as at contract inception.

Changes in the transaction price

The resolution of uncertain events or other changes in circumstances that change the amount ofconsideration to which an entity expects to be entitled in exchange for the promised goods orservices.

An entity shall allocate the change in the transaction price to the performance obligations identified in the contract before the modification if, and to the extent that, the change in the transaction price is attributable to an amount of variable consideration promised before the modification and the modification is accounted for

In all other cases in which the modification was not accounted for as a separate contract, an entity shall allocate the change in the transaction price to the performance obligations in the modified contract

An entity shall account for a change in the transaction price that arises as a result of a contract modification:

After contract inception, the transaction price can change for various reasons including:

Mahamud Hosain FCA

Contract costs

Incremental costs of obtaining a contractAn entity shall recognise as an asset the incrementalcosts of obtaining a contract with a customer if theentity expects to recover those costs.

The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission).

Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

Mahamud Hosain FCA

Contract costs

the costs relate directly to a contract or to an anticipated contract that the entity can specifically identify

the costs generate or enhance resources of the entity that will be used in satisfying performance obligations in the future; and

for example, costs relating to services to be provided under renewal of an existing contract or costs of designing an asset to be transferred under a specific contract that has not yet been approved

Costs to fulfil a contract:If the costs incurred in fulfilling a contract with a customer are not within the scopeof another Standard, an entity shall recognise an asset from the costs incurred to fulfil acontract only if those costs meet all of the following criteria

the costs are expected to be recovered.

Mahamud Hosain FCA

direct labour (for example, salaries and wages of employees who provide the promised services directly to the customer

Costs that relate directly to a contract …

Costs that relate directly to a contract includes any of the following:

direct materials (for example, supplies used in providing the promised services to a customer);

allocations of costs that relate directly to the contract or to contract activities (forexample, costs of contract management and supervision, insurance and depreciation oftools and equipment used in fulfilling the contract

costs that are explicitly chargeable to the customer under the contract; and

other costs that are incurred only because an entity entered into the contract (for example, payments to subcontractors).

Mahamud Hosain FCA

costs of wasted materials, labour or other resources to fulfil the contract that were not reflected in the price of the contract

Cost to expense off…

general and administrative costs (unless those costs are explicitly chargeable to the customer under the contract)

costs that relate to satisfied performance obligations in the contract (ie costs that relate to past performance); and

costs for which an entity cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations (or partially satisfied performance obligations)

An entity shall recognise the following costs as expenses when incurred:

Mahamud Hosain FCA

Amortisation & Impairments of Cost

An entity shall update the amortisation to reflect a significant change in the entity’s expected timing of transfer to the customer of the goods or services to which the asset relates

An asset recognised under this standard shall be amortised on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates.

the remaining amount of consideration that the entity expects to receive in exchange for the goods or services to which the asset relates; less

the costs that relate directly to providing those goods or services and that have not been recognised as expenses

An entity shall recognise an impairment loss in profit or loss to the extent that the carryingamount of an asset recognised exceeds

An entity shall recognise in profit or loss a reversal of some or all of an impairment loss previously recognised when the impairment conditions no longer exist or have improved. The increased carrying amount of the asset shall not exceed the amount that would have been determined (net of amortisation) if no impairment loss had been recognised previously.

Mahamud Hosain FCA

Control of an asset is defined as the ability to direct the use of and obtainsubstantially all of the remaining benefits from the asset. This includes the ability toprevent others from directing the use of and obtaining the benefits from the asset.

Step 5

Recognise revenue when (or as) the entity satisfies a performance obligation

Revenue is recognised as control is passed, either over time or at apoint in time.

using the asset to produce goods or provide services;

The benefits related to the asset are the potential cash flows that may be obtaineddirectly or indirectly. These include, but are not limited to:

using the asset to enhance the value of other assets;

using the asset to settle liabilities or to reduce expenses

selling or exchanging the asset

pledging the asset to secure a loan; and

holding the asset.

Mahamud Hosain FCA

Presentation

When either party to a contract has performed, an entity shall present the contract in the statement of financial position as a contract asset or a contract liability

If a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (ie a receivable), before the entity transfers a good or service to the customer, the entity shall present the contract as a contract liability when the payment is made or the payment is due (whichever is earlier).

If an entity performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, the entity shall present the contract as a contract asset, excluding any amounts presented as a receivable.

This Standard uses the terms ‘contract asset’ and ‘contract liability’ but does not prohibit an entity from using alternative descriptions in the statement of financial position. If an entity uses an alternative description for a contract asset, the entity shall provide sufficient information for a user of the financial statements to distinguish between receivables and contract assets.

Mahamud Hosain FCA

Disclosure

The objective of the disclosure requirements is for an entity todisclose sufficient information to enable users of financial statementsto understand the nature, amount, timing and uncertainty of revenueand cash flows arising from contracts with customers.To achievethat objective, an entity shall disclose qualitative andquantitative information about all of the following:

its contracts with customers

the significant judgements, and changes in the judgements, made in applying this Standard to those contracts

any assets recognised from the costs to obtain or fulfil a contract with a customer

An entity shall consider the level of detail necessary to satisfy the disclosure objective and how much emphasis to place on each of the various requirements.

Mahamud Hosain FCA

Disclosure

Contracts with customers:An entity shall disclose all of the following amounts for the reportingperiod unless those amounts are presented separately in thestatement of comprehensive income in accordance with otherStandards:

revenue recognised from contracts with customers, which the entity shall discloseseparately from its other sources of revenue; and

any impairment losses recognised (in accordance with BFRS 9) on any receivables orcontract assets arising from an entity’s contracts with customers, which the entity shalldisclose separately from impairment losses from other contracts.

Mahamud Hosain FCA

Disclosure

Disaggregation of revenue:An entity shall disaggregate revenue recognised from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

In addition, an entity shall disclose sufficient information to enable users of financial statements to understand the relationship between the disclosure of disaggregated revenue and revenue information that is disclosed for each reportable segment, if the entity applies BFRS 8 Operating Segments

Mahamud Hosain FCA

Contract balances; opening, closing & movements

Other major Disclosure…

An entity shall disclose all of the following:

Performance obligations;

Transaction price allocated to the remaining performance obligations

Determining the transaction price and the amounts allocated to performance obligations

Assets recognised from the costs to obtain or fulfil a contract with a customer

Determining the timing of satisfaction of performance obligations

Practical expedients/Measure: If an entity elects to use the practical expedient the entity shall disclose that fact.

Mahamud Hosain FCA

BFRS 15 require a cohesive set of disclosure requirements providing userscomprehensive information

significant judgements, and changes in judgements, made inapplying the requirements to those contracts; and

Improvement Disclosure requirement [in8]

revenue recognised from contracts with customers, including the disaggregation of revenue into appropriate categories

contract balances, including the opening and closing balancesof receivables, contract assets and contract liabilities

performance obligations, including when the entity typicallysatisfies its performance obligations and the transaction price thatis allocated to the remaining performance obligations in a contract

assets recognised from the costs to obtain or fulfil a contractwith a customer.

a

b

c

d

e

Mahamud Hosain FCA

Mahamud Hosain FCA

Methods for measuring progress towards complete satisfaction of a performance obligation

Methods that can be used to measure an entity’s progress towards complete satisfaction of a performance obligation satisfied over time in accordance with the following

output methods

input methods

Mahamud Hosain FCA

output methods

Output methods recognize revenue- on the basis of direct measurements of the value ofgoods or services transferred to date to the customer- relative to the remaining goods or services promised under the contract.

Output methods include methods such as surveys of performance completed todate, appraisals of results achieved, milestones reached, time elapsed and unitsproduced or units delivered.

When an entity evaluates whether to apply an output method to measure itsprogress, the entity shall consider whether the output selected wouldfaithfully depict the entity’s performance towards complete satisfaction

Mahamud Hosain FCA

input methods

Input methods recognise revenue on the basis- of the entity’s efforts or inputs to the satisfaction of aperformance obligation (for example, resources consumed, labourhours expended, costs incurred, time elapsed or machine hoursused)- relative to the total expected inputs to the satisfaction of thatperformance obligation.

If the entity’s efforts or inputs are expended evenly throughout theperformance period, it may be appropriate for the entity to recogniserevenue on a straight-line basis

When a cost incurred does not contribute to an entity’s progressin satisfying the performance obligation.

Mahamud Hosain FCA

Sale with a right of return

In some contracts, an entity transfers control of a product to a customer and also grants the customer the right to return the product for various reasons (such as dissatisfaction with the product) and receive any combination of the following:

a full or partial refund of any consideration paid;

a credit that can be applied against amounts owed, or that will beowed, to the entity; and

another product in exchange.

Mahamud Hosain FCA

Sale with a right of return

To account for the transfer of products with a right of return (and for some services that are provided subject to a refund), an entity shall recognise all of the following

revenue for the transferred products in the amount of consideration to which the entity expects to be entitled (therefore, revenue would not be recognised for the products expected to be returned);

a refund liability; and

an asset (and corresponding adjustment to cost of sales) for its right to recover products from customers on settling the refund liability.

Mahamud Hosain FCA

Unlimited right to return

Q: Company A distributes VCDs and DVDs and allows key customers to

return any slow-moving stock. The returns could result in replacement

with other VCDs and DVDs or return of cash. Company A is able to

make a reliable estimate of the amount of returns. How should

Company A account for its revenues?

A: The entity has transferred to the buyer the significant risks and rewards of

ownership. Rrevenue should be recognised on initial delivery of the goods in an

amount that reflects a reduction for the estimated amount to be returned.

Mahamud Hosain FCA

Retention of Control

Non-cancellable purchase

order

Title is witheld

until payment

Company ACustomer

May Company A recognise revenue once its products have been shipped?

A : If a seller retains legal title “solely to protect the collectibility of the amount due”,

revenue recognition is not allowed.

Mahamud Hosain FCA

Warranties

It is common for an entity to provide a warranty in connection with the sale of a product (whether a good or service). The nature of a warranty can vary significantly across industries and contracts.

Some warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications.

Other warranties provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications.

Mahamud Hosain FCA

Warranties

Whether warranty are separate pack (different from Original Product)?

If Yes : (i) the warranty is a distinct service (ii) the entity shall account for the promised warranty as a performance obligation (iii) the entity shall allocate a portion of the transaction price to that performance obligation over warranty periodIf No: (i) the entity shall account for the warranty in accordance with BAS 37 ---in case of assurance on specifications [based on experience of claim provide provision]

(ii) If the promised warranty provides the customer with a service in addition to the assurance. ---Transaction price divide in Product & Service and Service price to allocate

Mahamud Hosain FCA

Principal versus agent considerations

When another party is involved in providing goods or services to acustomer,

- the entity shall determine whether the entity is a principal(performance of contract obligation remain with the entity);

- the entity is an agent (performance of contract obligation remain withother party) .

An entity is a principal if the entity controls a promised good or service before the entity transfers the good or service to a customer. [Merely for legal reason; if entity has control, it does not qualify the entity as principle]

When an entity that is a principal, it recognises revenue in the gross amount in exchange for those goods or services transferred

Mahamud Hosain FCA

Principal versus agent considerations

An entity is an agent if the entity’s performance obligation is toarrange for the provision of goods or services by another party.

When an entity, the agent recognises revenue in the amount of any fee or commission

An entity’s fee or commission is the net amount of considerationthat the entity retains after paying the other party theconsideration received in exchange for the goods or services to beprovided by that party.

Mahamud Hosain FCA

Advertising commissions

Revenue should be recognised for media commissions

for example running a series of advertisements,

when the related advertising appearsbefore the public.

Mahamud Hosain FCA

Franchise fees

Fees which are received for the use of continuing rights, granted as part of a franchise agreement

should be recognised as revenue

as the services are provided, orthe rights are used, which isperformance of obligation by the entity.

Mahamud Hosain FCA

Principal versus agent considerations

An entity is agent if

another party is primarily responsible for fulfilling the contract

the entity does not have inventory risk before or after the goods have been ordered by a customer, during shipping or on return

the entity does not have discretion in establishing prices for those goods or services

the entity’s consideration is in the form of a commission; and

the entity is not exposed to credit risk for the amount receivable from a customer

Mahamud Hosain FCA

Customer options for additional goods or services

Customer options to acquire additional goods or services for free or at adiscount come in many forms, including sales incentives, customeraward credits (or points), contract renewal options or other discountson future goods or services

If, an entity grants a customer the option to acquire additional goodsor services on certain conditions like,

In such case, the customer in effect pays the entity in advance forfuture goods or services

a discount for those goods or services to a customer in thatgeographical area or market/buying of certain amount/qty/certain time

and the entity only shall recognises revenue when those future goods

or services are transferred or when the option expires

Mahamud Hosain FCA

Customers’ unexercised rights

Upon receipt of a prepayment from a customer, an entity shallrecognise a contract liability in the amount of the prepayment thefuture.

An entity shall derecognise that contract liability (and recogniserevenue) when it transfers those goods or services and, therefore,satisfies its performance obligation

Against customer’s non-refundable prepayment, the customer notexercise all its contractual rights. Those unexercised rights areoften referred to as breakage

For breakage amount in a contract liability, the entity shall recognise the

expected breakage amount as revenue in proportion to the pattern of

rights exercised by the customer

If an entity does not expect to be entitled to a breakage amount, the entity

shall recognise the expected breakage amount as revenue when the

likelihood of the customer exercising its remaining rights becomes

remote

Mahamud Hosain FCA

Non-refundable upfront fees (and some related costs)

In some contracts, an entity charges a customer a non-refundableupfront fee at or near contract inception

Examples include joining fees in health club membership contracts,activation fees in telecommunication contracts, setup fees in someservices contracts and initial fees in some supply contracts

an entity shall assess whether the fee relates to thetransfer of a promised good or service

If the upfront fee is an advance payment for future goods or services

and, be recognised as revenue when those future goods or services are

provided.

The revenue recognition period would extend beyond the initial contractual

period if the entity grants the customer the option to renew the

Mahamud Hosain FCA

Licensing

A licence establishes a customer’s rights to the intellectual property of an entity. Licences of intellectual property may include, but are not limited to, any of the following:

software and technology;

motion pictures, music and other forms of media and entertainment;

franchises; and

patents, trademarks and copyrights

Mahamud Hosain FCA

Licensing

In addition to a licence, an entity may also promise to transfer other goods or services to the customer. Those promises may be explicitly stated in the contract or implied by an entity’s customary business practices, published policies or specific statements

Granting licence is not distinct from other promised goods or servicesin the contract, an entity shall account for the licence and thoseother promised goods or services together as a single performanceobligation.

If the licence is / not distinct, an entity shall determinewhether the performance obligation (which includes thepromised licence) is a performance obligation that is satisfiedover time or satisfied at a point in timeAccordingly, the entity shall account the transaction price for licence

Mahamud Hosain FCA

Licensing…Determine the period of right under license

Whether an entity’s promise to grant a licence provides a customer with

(i) either a right to access an entity’s intellectual property or (ii) a right to use an entity’s intellectual property,

Accordingly, the entity shall account the transaction price for licence

an entity shall consider whether a customer can direct the use of, and obtain substantially all of the remaining benefits from, a licence

(i) at the point in time at which the licence is granted(ii) throughout the licence period

Mahamud Hosain FCA

Sales-based or usage-based royalties

An entity shall recognise revenue for a sales-based or usage-based royalty promised in exchange for a licence of intellectual property only when (or as) the later of the following events occurs:

the subsequent sale or usage occurs; and

the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied).

Mahamud Hosain FCA

A repurchase agreement is a contract in which an entity sells an asset and also promises or has the option (either in the same contract or in another contract) to repurchase the asset.

Repurchase agreements

The repurchased asset may be :-(i) the asset that was originally sold to the customer/an asset

that is substantially the same as that asset, or (ii) another asset of which the asset that was originally sold is a

component

Repurchase agreements generally come in three forms:

an entity’s obligation to repurchase the asset (a forward);

an entity’s right to repurchase the asset (a call option); and

an entity’s obligation to repurchase the asset at the customer’s request(a put option).

Mahamud Hosain FCA

Sale with buy back option

Company A

Bought back

for 60m$

Sold for 50m$ - agreed to buyback at 60m$

Title is

transferred at

delivery

Should Company A recognise revenue and cost of goods sold

at the time of delivery?

A : No. Company A has not transferred to the buyer the control of the

assets. Transaction is in the nature of a financing arrangement.

Mahamud Hosain FCA

Sale with buy back option

a) Company A retains benefit of ownership (abilityto profit from price difference). If significant,revenue should not be recognised until expiration.

b) If A had the right to buy back at market price andthe goods are readily available in the market,revenue is recognized at the time of delivery.

Mahamud Hosain FCA

Sales Where are Seperately Identıfıable Components

Q : Company Z operates a chain of supermarkets and they have just launched theircampaign for the month of Ramadan. The campaign includes a fixed price of 240TL for a Ramadan pack which includes an assortment of different food products, analarm clock, 5 time free car washing service from the car washing centers operatednext to the supermarkets (the car washing service is owned by Company Z) and cellphone top up card for 1,000 minutes to be used in the mobile virtual networkoperated by Company Z.

How should Company account for the 240 TL received from thecustomers of this campaign?

A: BFRS 15 requires to apply the recognition criteria to theseparately identifiable components of a single transaction inorder to reflect the substance of the transaction.

As a result, Company Z would have to divide this pack to separately identifiedcomponents and recognise revenue separately for every component byapplying appropriate recognition criteria.

Mahamud Hosain FCA

A forward or a call option

If an entity has an obligation or a right to repurchase the asset (a forward or a call option)

a lease in accordance with BAS 17 , if the entity can or must repurchase the asset for an amount that is less than the original selling price of the asset;

a financing arrangement in accordance with following paragraph if the entity can or must repurchase the asset for an amount that is equal to or more than the original selling price of the asset

a customer does not obtain control of the asset because the customer is limited in its ability to direct the use of, and obtain substantially all of the remaining benefits from

the asset even though the customer may have physical possession of the asset. Consequently, the entity shall account for the contract as either of the following:

Mahamud Hosain FCA

financing arrangement

If the repurchase agreement is a financing arrangement, the entity shall continue to recognise the asset (not to recognize revenue) and also recognise a financial liability for any consideration received from the customer.

if applicable, as processing or holding costs (for example, insurance)

The entity shall recognise the difference between the amount ofconsideration received from the customer and the amount ofconsideration to be paid to the customer as interest

If the option lapses unexercised, an entity shall derecognise the liability

and recognise revenue

When comparing the repurchase price with the selling price, an

entity shall consider the time value of money

Mahamud Hosain FCA

Sales date

Nominal amount : 100$

To be paid in

180 days

180 days

Discounted amount :

95$Interest income :

5$

When the arrangement effectively constitutes a financing transaction,

(e.g. an entity may provide interest free credit to the buyer or accept a note receivable

bearing a below-market interest rate from the buyer), the fair value of the consideration

is determined by discounting all future receipts using an imputed rate of interest.

Discounted at

market rate

financing arrangement

Mahamud Hosain FCA

A put option

If an entity has an obligation to repurchase the asset at the customer’s request (a put option) at a price that is lower than the original selling price of the asset

To determine whether a customer has a significant economic incentive to exercise its right, an entity shall consider various factors:(i) the repurchase price to the expected market value of the asset at the

date of the repurchase; (ii) and the amount of time until the right expires

the entity shall consider at contract inception whether the customer has a significant economic incentive to exercise that right

if the customer has a significant economic incentive to exercise that right, the entity shall account for the agreement as a lease in accordance with BAS 17.

Mahamud Hosain FCA

A put option

If the customer does not havea significant economic incentive to exercise its right at a price that islower than the original selling pricethe entity shall account for the agreement as if it were the sale of aproduct with a right of return

If the repurchase price of the asset is(i) equal to or greater than the original selling price and(ii) more than the expected market value of the asset,

the contract is in effect a financing arrangement and, therefore, shallbe accounted for accordingly

Mahamud Hosain FCA

financing arrangement

If the repurchase agreement is a financing arrangement, the entityshall continue to recognise the asset (not to recognize revenue) and alsorecognise a financial liability for any consideration received from thecustomer.

if applicable, as processing or holding costs (for example, insurance)

The entity shall recognise the difference between the amount ofconsideration received from the customer and the amount ofconsideration to be paid to the customer as interest

If the option lapses unexercised, an entity shall derecognise the liability

and recognise revenue

When comparing the repurchase price with the selling price, an

entity shall consider the time value of money

Mahamud Hosain FCA

Consignment arrangements

When an entity delivers a product to another party (such as a dealer or a distributor) for sale to end customers, the entity shall evaluate whether that other party has obtained control of the product at that point in time.

A product that has been delivered to another party may be held ina consignment arrangement if that other party has not obtainedcontrol of the product

Accordingly, an entity shall not recognise revenue upon delivery of a product to another party if the delivered product is held on consignment

Mahamud Hosain FCA

GOODS SHIPPED FOB SHIPPING POINT BUT

SELLER ARRANGES SHIPPING

May Company A recognise revenue once its products have been shipped?

No. While title has passed, Company A has retained a significant risk of

ownership. The fact that Company A's insurance would cover a substantial

loss is evidence that it has managed its risk, but Company A has still retained

the risk.

Company A FOB Shipping

Point

Assumed

risk during

shipment

Insured by

Company A

Mahamud Hosain FCA

GOODS SHIPPED FOB DESTINATION BUT

SHIPPING COMPANY ASSUMES RISK

May Company A recognise revenue once its products have been shipped?

No. While Company A has managed its risk, it has not transferred tisk to

the buyer.

Company A FOB

Destination

Mahamud Hosain FCA

Consignment arrangements

Indicators that an arrangement is a consignment arrangement include, but are not limited to, the following:

the product is controlled by the entity until the sale of the product to a customer of the dealer (other party)

the entity is able to require the return of the product ortransfer the product to a third party (such as another dealer);

the dealer does not have an unconditional obligation to payfor the product (although it might be required to pay adeposit).

Mahamud Hosain FCA

Bill & Hold arrangements

A bill-and-hold arrangement is a contract under which an entity bills a customer for a product but the entity retains physical possession of the product until it is transferred to the customer at a point in time in the future.

For some contracts, control is transferred either when the product isdelivered to the customer’s site or when the product is shipped,depending on the terms of the contract (including delivery andshipping terms).

For some contracts, a customer may obtain control of a product even though that product remains in an entity’s physical possession

To recognises revenue for the sale of a product on a bill-and-hold basis,the entity shall consider whether it has remaining performanceobligations

Mahamud Hosain FCA

Bill & Hold arrangements

Non-cancellable purchase

order

Company A Customer

Delivery is delayed on customer’s

request

Revenue can only be recognized only if the following are met :

– Delivery is probable

– Item is identified and ready for delivery

– Buyer specifically acknowledges the deferred delivery instructions

– Usual payment terms apply

– Buyer must have a substantial business purpose for bill and hold basis

Mahamud Hosain FCA

Customer Acceptances

A customer’s acceptance of an asset may indicate that the customer hasobtained control of the asset

Customer acceptance clauses allow a customer to cancel a contract orrequire an entity to take remedial action if a good or service doesnot meet agreed-upon specifications.

at the time of recognizing revenue an entity shall consider whether customer obtains control of a good or service

If revenue is recognized before customer acceptance (as customer hasobtained control of the assets),

the entity must consider whether there are any remaining performanceobligations (for example, installation of equipment) and evaluatewhether to account for them separately

Mahamud Hosain FCA

Customer Acceptances

-Only if the probability of non-

acceptance can be reliably

estimable based on historical data.

Production Delivery Customer Acceptance Collection

Recognize revenue at

delivery with a provision for

estimated returns?

OR?

Wait until acceptance?

-Otherwise wait until earlier of

acceptance and expiry of

acceptance period.

Mahamud Hosain FCA

LAY AWAY SALES

Delivery is witheld until final payment

Total price :$2000

Upfront paid: $1200

Company Z's lay away policy requires that customers put down at least 25 per cent of

the sales price as an up-front, non-refundable deposit. Once a deposit is received, Z

identifies the product to be sold and segregates it in its warehouse.

Company Z's experience with lay away sales is that most sales are consummated with

an average six-month lay away period before the customer pays the entire sale

amount. How should Company Z account for the deposit received?

Mahamud Hosain FCA

LAY AWAY SALES

Revenue is recognized when a "significant" deposit is received. The determination of whether a deposit is considered significant is a matter of careful judgment, based on all of the relevant facts and circumstances.

In any case, the final conclusion should be supported by sufficient objective evidence

In this case, the deposit is significant, and therefore, Company A would recognise the sale for the home theatre for $2,000 with a receivable for $800.

Mahamud Hosain FCA

TRADE LOADING" AND "CHANNEL STUFFING"

Sometimes manufacturers or dealers try to enhance the apparent volumeof their sales, profits, and/or market share by inducing their wholesalecustomers to buy more product than they can promptly resell. The result isaccelerated, but not increased, volume, because the wholesalers'inventories become bloated and their future orders from themanufacturers are reduced. This practice is known as "trade loading" or"channel stuffing".

How is revenue recognised in the case of trade loading or channel stuffing?

If the revenue recognition criteria in BFRS 15 for sales of goods are met, as

obligation to customer met, the revenue should be recognised. Revenue is

recorded net of the expected returns. Therefore, management must estimate

the amount of product to be returned.

Mahamud Hosain FCA

Changes in other BAS/BFRS

Contingent liabilities

56 After initial recognition and until the liability is settled, cancelled orexpires, the acquirer shall measure a contingent liability recognisedin a business combination at the higher of:

BFRS 3 Business Combinations

This requirement does not apply to contracts accounted for in accordance

with BAS 39.

(a) the amount that would be recognised in accordance with BAS 37; and

(b) the amount initially recognised less, the cumulativeamount of income recognised in accordance with BFRS 15

Mahamud Hosain FCA

Changes in other BAS/BFRS

BFRS 1 First-time Adoption of International Financial ReportingStandards

Revenue:D 34: A first-time adopter may apply the transition provisions in paragraph C5 ofBFRS 15.D 35: A first-time adopter is not required to restate contracts that were completedbefore the earliest period presented

Mahamud Hosain FCA

Revenue…….& recap…P

rep

are

r..E

nco

un

ter Recognition ….when to recognize

Ascertainment …How much…allocate over contract period?

Recording……..

Reporting….

Disclosures…

Off set/Netting off …is it allowed?

Matching principle…?

Related cost [guarantee…warranty…subsequent cost associated withservice/product….license….

Mahamud Hosain FCA

Questions

Answers

&Mahamud Hosain FCA

Thank You!

Thank You!

Mahamud Hosain FCA