Briefly explain the conditions when a contract modification shall be accounted for as a separate performance obligation.

Q: t contract inception, PFRS 15 requires an entity to determine how the performance obligations…

A: Contract is a legal document or agreement between the two parties with their  mutual obligation.

Q: . Defined by IFRS 2 as a vesting condition that requires the counterparty to complete a specified…

A: IFRS 2 talks about the reporting of share based payment transactions. As per this, the entities who…

Q: Define forward contract.

A: It is a form of derivative contract which is used as an agreement

Q: The ability to meet short term obligations is termed

A: A short-term liability is referred to as the financing obligation that being liable to an…

Q: Allocate a contract’s transaction price to multiple performance obligations.

A:

Q: On what basis should the transaction price be allocated to various performance obligations? Identify…

A:

Q: Why would the existence of conditions subsequent and precedent affect the discharge of a contract?

A: A contract is an agreement between more than one person to perform the duties mentioned in the…

Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…

A: The percentage of completion method is an accounting technique in which long-term deed income and…

Q: What type of contract has been formed in this case?

A: Contracts are the agreements between two parties. It gives the  option to buy,sell, lend etc. It…

Q: Define contract assets.

A: Definition:   Assets: These are the resources owned and controlled by business and used to produce…

Q: If the down payment is non-refundable, how much is the contract liability to be initially recorded?

A: Contract liability that is to be recorded initially can be calculated by adding the down payment…

Q: Understand how variable consideration and other aspects of contracts affect the calculation and…

A: Variable consideration:  It refers to the amount of revenue that is to be recognized as per the…

Q: Which one of the following situation where a performance obligation is satisfied over time ?  a-…

A: As per IFRS15 Performance obligation is satisfied over time if any of the following conditions are…

Q: For what reasons should the percentage-of-completionmethod be used over the completed-contract…

A: Completed contract method: In this method the revenue and profit are recognized only after the…

Q: Define the term Contract Modifications.

A: Accounting: Accounting is an art of collecting, recording, summarizing and presenting the financial…

Q: How to Allocate the Transaction Price to Each Performance Obligation?

A: In revenue recognition , following steps are done- first of all we determine whether there is a…

Q: Under PFRS 15, how does a consignor satisfy its performance obligation under consignment contract?…

A: SOLUTION-   EXPLANATION-  A PERFORMANCE OBLIGATION IS SATISFIED BY TRANSFERRING A PROMISED GOOD OR…

Q: Define the contract liabilities.

A: Liability: Liabilities include the claims of the creditors on the assets of the business. The…

Q: Describe Short-Term Obligations Are Expected to Be Refinanced.

A: Refinancing refers to the process where revival of interest rate, payment schedule and terms of…

Q: ontr

A: Definition of a Contract: A contract is a legally enforceable agreement. It might be a promise to do…

Q: how payment or performance extinguishes an obligation.

A: An obligation arises when an agreement made between parties satisfies all the necesaary conditions…

Q: 1 State whether or not the contract should be accepted and support your conclusion with appropriate…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Define contract laibilities.

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: Define the term contract assets.

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: Is variable consideration included in the calculation of a contract’s transaction price? If so, how…

A:

Q: Partial satisfaction of a multiple performance obligation is reported on the balance sheet asa.…

A: Performance obligation: A performance obligation is a promise made by a seller to transfer the goods…

Q: What is a forward contract?

A: Introduction: This question is related to the concept of financial derivatives. Derivative…

Q: How does a seller allocate a transaction price to a contract’s performance obligations?

A: Transaction price: Transaction price is the amount of consideration that is estimated by the company…

Q: Describe about what is the lessor, lessee and lease contract.

A: Lease Contract:   Lease is a contractual agreement whereby the right to use an asset for a…

Q: Which type of contract contingency is most likely to A O Financing contingency. BO Partner approval…

A: The right answer  is  option a  Financing contingency

Q: Explain the difference between contract assets, contract liabilities, and accounts receivable.

A: Account receivable: The amount of money to be received by a company for the sale of goods and…

Q: Which of the following shall be excluded in the contract costs of a construction contract? * A.…

A: Contract costs should comprise:(a) costs that relate directly to the specific contract;(b) costs…

Q: Describe the obligations of postretirement.

A:

Q: Describe the conditions when contract assets and liabilitiesare recognized and presented in…

A: Contract assets: It is the right of the firm to receive payment for the goods transferred or…

Q: What must a contract include for the contract to exist for purposes of revenue recognition?

A: Step 1: An accounting principle that has outlined certain conditions for the treatment of the…

Q: What is a performance obligation? Under what conditionsdoes a performance obligation exist?

A:

Q: What is the relationship between provisions, onerous contracts, contingent liabilities and other…

A: The book in which the company records all its transactions initially is termed as journal book. From…

Q: Why does “Identify the performance obligation(s) in the contract,” is important? Explain with…

A: Definition: Performance obligation: A performance obligation is a promise to transfer to the…

Q: Explain the reporting for (a) costs to fulfill a contract and (b) collectibility.

A: Fulfillment costs are divided into two categories: (1) Those that arise from assets; (2) Those that…

Q: Define (a) a contingency and (b) a contingent liability

A: a. Contingency: Contingency refers to an uncertain situation in which the uncertain situation exists…

Q: What is a performance obligation?

A: Definition: Performance obligation: Performance obligation is a promise to transfer goods or…

Q: Discuss the contract according to its enforceability?

A: In basic terms, a contract implies when two gatherings put into composing an understanding that…

Q: What characteristics make a good or service a performance obligation?

A: Performance obligation: Performance obligation is the promise made by the seller to supply the goods…

Q: Discuss the accounting and reporting requirements for leasing contracts with unique characteristics.

A: Given : This question explains about the accounting and reporting requirements for leasing contracts…

Q: Explain how to allocate the transaction price to each performance obligation.

A: If a customer receives a discount for acquiring a bundle of goods or services, the entity should…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.