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Principal Ltd hired Agent Ltd to provide consulting services on how to increase their profit while remaining sustainable. On completing the consultation Agent Ltd will provide a final recommendation to Principal Ltd in 6 months' time and a fee of $400,000 will be received. The Junior accountant of Agent Ltd argues that the amount should be accounted at the end of six-month period as a revenue. Required: As a Senior financial accountant of Agent Ltd, you are required to explain the concept of revenue recognition over a period of time and at a point in time and justify whether proposed treatment by the Junior accountant is correct as per AASB 15 "Revenue from Contracts with Customers".

Principal Ltd hired Agent Ltd to provide consulting services on how to increase their profit while remaining sustainable. On completing the consultation Agent Ltd will provide a final recommendation to Principal Ltd in 6 months' time and a fee of $400,000 will be received. The Junior accountant of Agent Ltd argues that the amount should be accounted at the end of six-month period as a revenue. Required: As a Senior financial accountant of Agent Ltd, you are required to explain the concept of revenue recognition over a period of time and at a point in time and justify whether proposed treatment by the Junior accountant is correct as per AASB 15 "Revenue from Contracts with Customers

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