Which of the following is NOT a step in the five-step model for revenue recognition under IFRS 15?

• Identify the contract with the customer.

• Identify the performance obligations in the contract.

• Determine the transaction price.

• Allocate the transaction price to the performance obligations.

• Recognize revenue when the customer obtains control of the asset.

Under IFRS 15, a performance obligation is:

• A promise in a contract to transfer a distinct good or service to the customer.

• A right of the customer to cancel the contract.

• An obligation of the customer to pay the transaction price.

• A guarantee provided by the seller for the quality of the goods or services.

A contract exists under IFRS 15 when:

• The contract is in writing.

• The contract is legally enforceable.

• The contract has commercial substance.

• All of the above.

The transaction price under IFRS 15 is:

• The amount the seller expects to receive in exchange for transferring goods or services to the customer.

• The fair value of the goods or services transferred to the customer.

• The cost of the goods or services transferred to the customer.

• The present value of the future cash flows expected to be received from the customer.

On October 1, 2024, Beta Corp. sold 1,000 units of Product X to Alpha Co. for $50 per unit, totaling $50,000. The contract includes a right of return, allowing Alpha Co. to return any units within 60 days for a full refund. Beta Corp.'s past experience indicates that approximately 5% of similar sales are typically returned. Beta Corp. estimates that the cost of recovering the returned goods will be negligible.

What amount of revenue should Beta Corp. recognize on October 1, 2024, related to this sale?

• $45,000

• $47,500

• $50,000

• $52,500

Company A sells software licenses for $100,000. The contract includes post-contract support services for two years. Based on standalone selling prices, the software license is valued at $80,000 and the support services at $30,000. How much revenue should Company A recognize immediately upon delivery of the software?

• $72,727

• $100,000

• $66,667

• $27,273

Company B enters into a contract to deliver 100 units of Product X for $50 per unit. The contract also includes a volume discount. If the customer purchases more than 80 units, the price per unit is reduced to $45 for all units purchased. Company B estimates that the customer will purchase all 100 units. What is the total transaction price?

• $4,500

• $5,000

• $4,750

• $5,250

Company A sells equipment for $200,000. The contract includes installation services. The standalone selling price of the equipment is $180,000 and the installation services are $30,000. The installation is considered a separate performance obligation. Company A incurs costs of $20,000 for the installation. What amount of revenue should Company A recognize immediately upon delivery of the equipment?

• $171,429

• $180,000

• $200,000

• $150,000

Company B sells software for $50,000. The contract includes a one-year post-contract support (PCS) arrangement. The standalone selling price of the software is $45,000 and the PCS is $10,000. The customer pays $50,000 upfront. Company B estimates that it will cost $4,000 to provide the PCS. How much revenue should Company B recognize related to the PCS in the first month of the support period?

• $757

• $833

• $417

• $10,000

Company D provides a service for $12,000. The customer pays $12,000 upfront. The service is provided over a 12-month period. How much revenue should Company D recognize each month?

• $1,000

• $12,000

• $6,000

• $500