IFRS 15

What is a Contract?

• An agreement between two or more parties that must be written out in a legal document.

• An agreement between two or more parties that must have a fixed duration

• An agreement between two or more parties that creates enforceable rights and obligations.

• An agreement between two or more parties that cannot be modified by either party.

When did the most recent changes to IFRS 15 become effective?

• January 1, 2013

• January 1, 2016

• January 1, 2018

• January 1, 2011

What is the objective of IFRS 15?

• Establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

• Establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity's future cash flows.

• To specify the financial reporting for the exploration for and evaluation of mineral resources.

• To specify the financial reporting requirements for regulatory deferral account balances that arise when an entity provides goods or services to customers at a price or rate that is subject to rate regulation.

Which of the following is/are an exception for the application of IFRS 15?

• A. Insurance Contracts

• B. Non-monetary exchanges between entities in the same line of business to facilitate sales to customers or potential customers.

• C. Lease Contracts

• D. All of the above

• E. A and C

Which of the following is NOT a criteria that must be met under IFRS 15 for a contract to be accounted for?

• The parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations.

• The entity has transferred the goods or services to the other party to the contract and it is probable that the entity will collect the consideration to which it will be entitled in exchange for the goods or services.

• The entity can identify the payment terms for the goods or services to be transferred

• The contract has commercial substance (ie. the risk, timing or amount of the entity's future cash flows is expected to change as a result of the contract).

• The entity can identify each party's rights regarding the goods or services to be transferred

True or False;

A contract is wholly unperformed if both of the following criteria are met: the entity has not yet transferred any promised goods or services to the customer; and

the entity has not yet received, and is not yet entitled to receive, any consideration in exchange for promised goods or services.

• TRUE

• FALSE

True or False; An entity may apply the Standards to a portfolio of contracts with similar characteristics as individual contracts

• True

• False

How often can an entity change the method in which they measure an uncertainty in variable considerations in a contract?

• Never

• Each time there is new information

• One method