FRS 115

Which of the following is the primary objectives of IFRS 15?

• To provide guidance on accounting for leases

• To specify how and when revenue is recognised

• To outline the accounting for income taxes

• To determine the fair value of financial instruments

Which of the following is NOT a step in the revenue recognition process under IFRS 15?

• Identify the contract with the customer

• Determine the transaction price

• Assess the credit risk of the customer

• Recognize revenue when the performance obligation is satisfied

How does IFRS 15 impact the timing of revenue recognition?

• It allows for revenue to be recognized at any time

• It requires revenue to be recognized when control of goods or services is transferred

• It mandates revenue recognition only at year-end

• It eliminates the need for revenue recognition altogether

Which of the following best describes the concept of 'transaction price' in IFRS 15?

• The amount of consideration to which an entity expects to be entitled

• The total revenue recognized at year-end

• The cost incurred to deliver goods or services

• The estimated fair value of the goods sold

How does IFRS 15 address variable consideration in revenue recognition?

• It requires that variable consideration be ignored

• It allows for estimation of variable consideration based on expected value or most likely amount

• It mandates that variable consideration be recognized only at the end of the contract

• It prohibits any form of variable consideration

Which of the following statements is TRUE regarding variable consideration?

• It should always be excluded from the transaction price

• It should be included in the transaction price

• It should be included in the transaction price only if it is probable that a significant reversal will not occur

• It is always based on historical trend

Under FRS 115, how should an entity account for costs to obtain a contract?

• Recognise them as an expense when incurred

• Capitalise them as an asset if they are expected to be recovered

• Recognise as reduction in revenue

• Allocate them to performance obligations

Which of the following is typically excluded from the scope of FRS 115?

• Revenue from the sale of goods

• Revenue from service contracts

• Revenue from operating leases

• Revenue from licensing agreementws

Which of the following is NOT the conditions to recognise revenue over time?

• The customer receives and consumes the benefits of the work as it is performed

• The asset being created has no alternative use to the entity and the entity has an enforceable right to payment for performance completed to date which at least cover the cost incurred to date

• The entity's performance creates or enhances an asset that the customer controls as the asset is created or enhanced

• The entity’s performance does not create an asset with an alternative use to the entity or the entity has an enforceable right to payment for performance completed to date which at least cover the cost incurred to date

Which of the following best describes the term 'control' in the context of IFRS 15?

• The ability to direct the use of and obtain substantially all of the remaining benefits from an asset

• The legal ownership of the asset

• The ability to sell the asset at any time

• The transfer of risks and rewards associated with the asset