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    PFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when a customer obtains control of a promised good or service and the amount of revenue can be measured reliably.

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    PFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when a customer obtains control of a promised good or service and the amount of revenue can be measured reliably.

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    PFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when a customer obtains control of a promised good or service and the amount of revenue can be measured reliably.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    85 views4 pages

    Con Con

    Uploaded by

    cpacpacpa
    PFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when a customer obtains control of a promised good or service and the amount of revenue can be measured reliably.

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    of 4

    PFRS 15

    1. What is the core principle of PFRS 15 Revenue from contracts with customer?
    a. Revenue should be recognized when the entity transfers control of goods or services
    to a customer.
    b. Revenue should be recognized when the entity transfers control of goods or services
    to a
    customer at an amount to which the entity expects to be entitled.
    c. Revenue should be recognized over time in a manner that depicts an entity’s
    performance.
    d. Revenue should be recognized at a point in time when the control of the goods or
    services is transferred to the customer.

    2. PFRS 15 applies to all contracts with customers except,


    a. leases
    b. insurance contracts
    c. financial instruments
    d. All of the above

    3. PFRS 15 provides the following steps in recognizing revenue except,


    a. Identify the contract/s with a customer
    b. Identify the performance obligations in the contract
    c. Determine the transaction price
    d. Allocate the transaction price to the performance obligations in the contract
    e. Recognize revenue when the entity satisfies a performance obligation
    f. Recognize revenue when the entity collected cash from the customer

    4. Under IFRS 15, where a contract with a customer has multiple performance obligations,
    what will be the accounting treatment to the transaction price?
    a. The transaction price shall be recognized as revenue to the most important
    performance obligation.
    b. The transaction price shall be allocated equally to the different performance
    obligations.
    c. The transaction price shall be allocated to the different performance obligations by
    reference to their relative standalone selling prices.
    d. The transaction price shall be recognized as revenue only at the end of completion
    of all performance obligations.

    5. Under IFRS 15, where the standalone selling prices of the different performance obligations
    in a contract with a customer are not available, what methods or approaches may be used to
    allocate the transaction price?
    a. Adjusted market assessment approach
    b. Expected cost plus a margin approach
    c. Residual approach but only permissible in limited circumstances
    d. Any of the above
    6. Under IFRS 15, when shall an entity recognize revenue from contracts with customers?
    a. When it is probable that future economic benefits will flow to the entity and the
    revenue can be measured reliably.
    b. When or as the entity satisfies the performance obligation.
    c. When the entity collected the cash from the customers.
    d. When the entity and the customers sign the contracts.

    7. Under IFRS 15, how does an entity satisfy the performance obligation on its contracts with
    customers?
    a. Satisfaction of performance obligation over time.
    b. Satisfaction of performance obligation at a point in time.
    c. Either A or B.
    d. Neither A nor B.

    8. Under IFRS 15, in which of the following instances will the revenue from contracts with
    customers be recognized at a point in time instead of over time?
    a. When the customer simultaneously receives and consumes all of the benefits
    provided by the entity as the entity performs.
    b. When the entity’s performance creates or enhances an asset that the customer
    controls as the asset is created.
    c. When the entity’s performance does not create an asset with an alternative use to the
    entity and the entity has an enforceable right to payment for performance completed
    to date.
    d. When the entity has transferred physical possession and legal title to the asset to the
    customer.

    9. Under IFRS 15, what shall be presented by the entity in its statement of financial position in
    relation to its contract with a customer where a customer has paid an amount of
    consideration prior to the entity performing by transferring the related good or service to the
    customer? a. Contract liability
    b. Contract asset
    c. Contract receivable
    d. Contract equity

    For Numbers 10 - 13
    On January 1, 2021, an entity accepted a long-term construction project for an initial contract
    price of P1,000,000 to be completed on June 30, 2023. On January 1, 2022, the contract price
    was increased to P1,500,000 by reason of change in the design of the project. The project was
    completed on December 31, 2023 which resulted to penalty amounting to P200,000.

    The entity provided the following data concerning the direct costs related to the said project:

    Year 2021 Year 2022 Year 2023


    Costs during the year P440,000 P680,000 P130,000
    Remaining estimated P660,000 P280,000 -
    costs to complete at
    the end of the year

    The outcome of the construction contract can be estimated reliably.

    10. What is the construction revenue to be recognized by the entity for the year ended
    December 31, 2021?
    a. P340,000
    b. P400,000
    c. P440,000
    d. P360,000

    11. What is the realized gross profit (gross loss) to be recognized by the entity for the year
    ended December 31, 2022?
    a. P200,000
    b. P80,000
    c. P180,000
    d. (P20,000)

    12. What is the balance of construction in progress on December 31, 2022?


    a. P1,200,000
    b. P900,000
    c. P1,120,000
    d. P1,020,000

    13. What is the realized gross profit (gross loss) to be recognized by the entity for the year
    ended December 31, 2023?
    a. P50,000
    b. (P30,000)
    c. P170,000
    d. (P120,000)

    For Numbers 14 - 17
    On January 1, 2018, an entity started the construction of a building at a fixed contract price
    of P1,000,000. On the same date, the customer paid a mobilization fee equal to 5% of contract
    price that will be deductible from the first billing.

    On 2018, the entity billed its customer equivalent to 30% of the contract price. On 2019, the
    entity billed again its customer amounting to 20% of the contract price. On 2020, the entity
    billed again its customer amounting to 40% of the contract price. The remaining billing was
    made at the year of completion of the project.

    The entity made collection from the customer at the end of year 2018, 2019 and 2020, in the
    amount of P120,000, P450,000 and P180,000, respectively.

    The outcome of construction contract cannot be estimated reliably.

    The entity provided the following data concerning the direct costs related to the said project:
    Year 2018 Year 2019 Year 2020
    Cumulative costs P360,000 P800,000 P870,000
    incurred as of the end
    of the year
    Remaining estimated P840,000 P250,000 P50,000
    costs to complete at
    the end of the year

    14. What is the realized gross profit (loss) for the year ended December 31,
    2019? a. (P50,000)
    b. (P200,000)
    c. P150,000
    d. None

    15. What is the realized gross profit (loss) for the year ended December 31,
    2020? a. P80,000
    b. P130,000
    c. P50,000
    d. None

    16. What is the excess of construction in progress over progress billings


    (progress billings over construction in progress) on December 31, 2020?
    a. (P30,000)
    b. (P80,000)
    c. P20,000
    d. P50,000

    17. What is the balance of accounts receivable on December 31, 2020?


    a. P150,000
    b. P100,000
    c. P50,000
    d. P120,000

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