Week 3: Revenue Recognition Flashcards
(6 cards)
When looking at a case that considers an assurance-type warranty under IFRS, we are required to analyze the case using both the IFRS Revenue standard and the IFRS Provisions and Contingencies standard.
True or False
True
In situations where a publicly traded entity determines that it has an obligation for a future cash outflow, and there is some uncertainty about the amount or the timing of that cash outflow, if it is more likely than not that the cash outflow will occur and the entity can reliably estimate the amount of the cash outflow, the estimated amount should be reported as a note to the financial statements.
True or False
False
Which statement about contingencies is incorrect?
A) It involves potential economic inflows and outflows of resources.
B) It is a future condition that depends upon the conclusion of a future event.
C) It involves uncertainty about either the timing or the amount.
D) It is a possible condition that depends upon the conclusion of a future event.
B
One of the ASPE criteria for determining if control is transferred at a point in time is: the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs.
True or False
False
The IFRS Revenue Standard uses the following example as a situation that has several performance obligations due to the several goods and services identified in the contract:
An entity, a contractor, enters into a contract to build a hospital for a customer. The entity is responsible for the overall management of the project and identifies various promised goods and services, including engineering, site clearance, foundation, procurement, construction of the structure, piping and wiring, installation of equipment and finishing.
True or False
False
In situations where a publicly traded entity determines that it has an obligation for a future cash outflow, and there is some uncertainty about the amount or the timing of that cash outflow, if it is more likely than not that the cash outflow will occur and the entity can reliably estimate the amount of the cash outflow, the estimated amount should be reported as a note to the financial statements.
True
False
False
