MFRS 15 Revenue from Contracts with Customers.

1. What is the core principle of MFRS 15?

• A. Recognize revenue when cash is received

• B. Recognize revenue when a contract is signed

• C. Recognize revenue to depict the transfer of goods or services

• D. Recognize revenue evenly over time

2. Which of the following is NOT one of the 5 steps in MFRS 15?

• A. Identify the contract

• B. Measure the fair value of cash flows

• C. Identify performance obligations

• D. Allocate the transaction price

3. A customer pays RM100 in advance for a product to be delivered in 3 months. Under MFRS 15, the entity should:

• A. Recognize RM100 as revenue immediately

• B. Recognize a liability (contract liability)

• C. Record as unearned income under IFRS 9

• D. Record it under equity

4) Raini Co, a company sells photocopying equipment, has prepared its draft financial statements for the year ended 30 September 20X4. It has included the following transactions in revenue at the stated amounts below.Which of these has been correctly included in revenue according to IFRS 15 Revenue from Contracts with Customers?

• A. Agency sales of $250,000 on which Raini Co is entitled to a commission.

• B. Sale proceeds of $20,000 for motor vehicles which were no longer required by

  Raini Co.

• C. Sales of $150,000 on 30 September 20X4. The amount invoiced to and received from the customer was $180,000, which included $30,000 for ongoing servicing work to be done by Raini Co over the next two years.

• Sales of $200,000 on 1 October 20X3 to an established customer which, (with the agreement of Raini Co), will be paid in full on 30 September 20X5. Raini Co has a cost of capital of 10%.

5. Sling Co entered into a contract which is expected to last 24 months on 1 January 20X4.

The fixed price which has been agreed for the contract is $5m. At 30 September 20X4 the costs incurred on the contract were $1.0m and the estimated remaining costs to complete were $2.4m. Sling Co measures satisfaction of the performance obligations under the contract based on the percentage of the project certified as completed. At 30 September20X4, the percentage certified as completed to date was 38%.On 20 September 20X4 Sling Co received a payment from the customer of $1.74m which was equal to the total of the amounts invoiced to date.What amount would be reported as a contract asset in Sling Co's statement of financial position as at 30 September 20X4?

• A. Nil

• B. $160,000

• C. $1,000,00

• $300,000

6. ABC Sdn Bhd enters into a contract with a customer to deliver a machine and provide maintenance services for two years. The total contract price is RM120,000. The standalone selling prices are:

Machine: RM100,000

Maintenance services: RM25,000

According to MFRS 15, how much revenue should ABC Sdn Bhd allocate to the machine?

• A. RM100,000

• B. RM96,000

• C. RM90,000

• D. RM85,714

7. Revenue is always recognized evenly over the contract period under MFRS 15.

• TRUE

• False

8. 8.Step 3 in MFRS 15 involves determining the transaction price.

• TRUE

• FALSE

9. 9.MFRS 15 allows estimation techniques to allocate transaction price to performance obligations.

• TRUE

• FALSE

10. An entity must re-evaluate variable consideration at every reporting period.

• TRUE

• FALSE