IFRS 15 provides guidance for the accounting for consideration received without the contract criteria being...
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IFRS 15 provides guidance for the accounting for consideration received without the contract criteria being met. Which one of the following statements is correct? Creamery Ltd. receives MU10,000 cash from a customer at contract inception but the contract criteria in IFRS 15 are not met therefore it would process the following journal upon receipt of the cash: Dr Cash MU10,000 Cr Other Income MU10,000 Cookie Crumbs Inc. receives MU18,000 from a customer six months before the contract criteria in IFRS 15 are met. As the contract criteria will ultimately be met, it would process the following journal upon receipt of the cash: Dr Cash MU18,000 Cr Revenue MU18,000 Sweet Tooth Ltd. receives MU38,000 from a customer before the contract criteria in IFRS 15 are met. As a result, it continues to assess the criteria and therefore upon receipt of the cash it processes the following journal: Dr Cash MU38,000 Cr Contract liability MU38,000 Fudgy Bites Inc. receives MU50,000 from a customer at contract inception however since the contract criteria in IFRS 15 are not met, it would process the following journal entry upon receipt of the cash: Dr Cash MU50,000 Cr Liability MU50,000
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