4 ASC 605-25-25-5 provides that, for an item delivered in an agreement with more than one delivery item, it is a separate unit of account, (1) the item must have an autonomous value and (2) `[i]f the agreement includes a general right of return in respect of the delivered item, the delivery or service of the item or undelivered items must be considered probable and materially under the control of the seller. be seen. When a contract performance reaches a point where the company is entitled to a payment, it is an indicator that control of the asset has been transferred to a customer. In order for an entity to recognize promised goods or services as performance obligations in a contract with a customer, the entity must determine that the goods or services are both (1) distinguishable and (2) distinguishable under the contract. Suppose a contract states that the provider provides free maintenance services without additional considerations. (This is equivalent to maintenance services for new vehicles sold for a certain period of time with a free maintenance service.) Maintenance services are subcontracted to third parties. The company notes that this agreement represents a separate promise as maintenance could be provided by a third party and is therefore different. Therefore, the counterparty of the product is divided into two performance bonds. 5 As is apparent from paragraph BC125 of asU 2014-09, typical service contracts create an asset only temporarily, where the asset is received and consumed by the customer at the same time. Recognition of revenue either over a certain period of time or at a specific point in time, depending on when a performance obligation is fulfilled in a contract. If an « entity transfers control of a good or service over time, » then that entity « fulfills the obligation to provide and captures revenue over time. » Therefore, before registering products, an entity should determine when control of a promised good or service (i.e., an asset) is transferred to a customer, whether it is transferred over time or at a specific point in time. Example 11, C, in ASC 6068 illustrates a situation where the equipment and the plant are different under the contract and therefore constitute separate performance obligations. This conclusion is based on the following facts: 1.
WHAT IS A PERFORMANCE OBLIGATION In simple terms, the performance obligation is a « promise » to deliver goods or services instead of payment (in advance or otherwise). This criterion is met for routine or recurring services, such as access. B.dem to the Internet, which is charged at a flat rate, or for cleaning services, but can also be applied to more complex contracts. While the application of this criterion is not easy, it is essential to focus on assessing whether another undertaking would essentially have to repeat the work it has done so far if that other undertaking were to fulfil the remaining performance obligation. In this assessment, an entity (IFRS 15.B4): 1. « The customer receives and at the same time enjoys the benefits that result from the entity`s performance while the entity provides its performance. » (Criterion 1) For certain goods or services, such as . B a piece of furniture, it is obvious that a customer will benefit from it himself. Sometimes a customer can only benefit from the good or service by using it with other readily available resources (e.g. B a mobile phone that requires a telecommunications service provider). An easily accessible resource is defined in IFRS 15.28 as a good or service sold separately (by the reporting entity or a third party) or a resource that the customer has already received from the entity (including goods or services that the entity transfers to the customer under the contract before the goods or services in question are transferred) or other transactions or events. See example 11 cases A/E, example 12 and example 56 cases A next to IFRS 15. A 2-step approach seems to work best.
First, consider the entities point a. . . .