Use the following information for the following questions.: A product and service are bundled together and sold to customers for $ 450. The fair values of the product and service are $ 350 and $ 150 respectively.
-The new IFRS standard, IFRS 15 Revenue from Contracts with Customers adopts a(n)
A) earnings approach to revenue recognition.
B) asset-liability approach to revenue recognition.
C) cash-based approach to revenue recognition.
D) earned and realized approach to revenue recognition.

Question

Use the following information for  the following questions.: A product and service are bundled together and sold to customers for $ 450. The fair values of the product and service are $ 350 and $ 150 respectively.
-The new IFRS standard, IFRS 15 Revenue from Contracts with Customers adopts a(n)
A) earnings approach to revenue recognition.
B) asset-liability approach to revenue recognition.
C) cash-based approach to revenue recognition.
D) earned and realized approach to revenue recognition.

Quizplus · Accepted Answer

IFRS 15 adopts an asset-liability approach to revenue recognition, which requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This approach considers the performance obligations and the timing of their fulfillment, as well as the transaction price and any variable considerations.

Use the Following Information for the Following Questions