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    Group Assignment - MFRS 15 Revenue Recognition Updated

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    Arisya Syafiya
    The document discusses the key aspects of MFRS 15 including the objective, scope, recognition, measurement, contract costs, and presentation and disclosure requirements. MFRS 15 establishes principles for reporting useful information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

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    Group Assignment - MFRS 15 Revenue Recognition Updated

    Uploaded by

    Arisya Syafiya
    18 views19 pages
    The document discusses the key aspects of MFRS 15 including the objective, scope, recognition, measurement, contract costs, and presentation and disclosure requirements. MFRS 15 establishes principles for reporting useful information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

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    GROUP ASSIGNMENT - MFRS 15 REVENUE RECOGNITION UPDATED

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    The document discusses the key aspects of MFRS 15 including the objective, scope, recognition, measurement, contract costs, and presentation and disclosure requirements. MFRS 15 establishes principles for reporting useful information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    18 views19 pages

    Group Assignment - MFRS 15 Revenue Recognition Updated

    Uploaded by

    Arisya Syafiya
    The document discusses the key aspects of MFRS 15 including the objective, scope, recognition, measurement, contract costs, and presentation and disclosure requirements. MFRS 15 establishes principles for reporting useful information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 19

    MFRS15 : REVENUE

    RECOGNITION
    MODEL
    STUDENTS’ NAME :
    NOR ARISYA SYAFIYA (232024007)
    KISHANN SARAVANAN (223023679)
    RUBHASHINI SEGARAN (223023610)

    LECTURER’S NAME : MADAM NURHASIKIN BINTI MAMAT


    SUBJECT : FINANCIAL ACCOUNTING I (ACCT1121)
    Table of contents
    01 02
    Objective of MFRS15 Scope of MFRS15

    03 04
    Recognition Measurement

    05 06
    Contract Cost Presentation and
    Disclosure
    01
    OBJECTIVE OF
    MFRS15
    OBJECTIVE
    ● The objective of MFRS 15 is to establish the
    principles that an entity shall apply to report
    useful information to users of financial statements
    about the nature, amount, timing, and uncertainty
    of revenue and cash flows arising from a contract
    with a customer.
    ● MFRS 15 is to provide one comprehensive
    revenue recognition model for all contracts with
    customers to improve comparability within
    industries, across industries, and across capital
    markets.
    Accounting is the language
    of business, and it tells the
    story of a company

    -Tanya Menon-
    02
    SCOPE OF
    MFRS15
    MFRS 15 Revenue from Contracts with Customers applies to all contracts with
    customers except for: leases within the scope of IAS 17 Leases; financial
    SCOPE
    instruments and other contractual rights or obligations within the scope of
    MFRS 9 Financial Instruments, MFRS 10 Consolidated Financial Statements,
    MFRS 11 Joint Arrangements.
    OF
    MFRS 15
    A contract with a customer may be partially within the scope of MFRS 15:

    ● If other standards do not provide guidance on how to separate and/or


    initially measure one or more parts of the contract, then MFRS 15 will
    be applied.
    ● If the other standards specify how to separate and/or initially measure
    one or more parts of the contract, then an entity shall apply those
    separation and measurement requirements first. The transaction price is
    then reduced by the amounts that are initially measured under other
    standards.
    03
    RECOGNITION
    REVENUE RECOGNITION

    Recognize when it is
    probable that future
    Measured at fair value of
    economic benefits will flow
    the consideration received
    to the entity, and these
    benefits can be measured
    reliably.
    Different Types of Revenue

    Sales of Goods Rendering Services Interest, Royalties and


    Dividends
    Common point of recognition - Recognized - reference to the Recognized:
    Point of Sale or Delivery stage of completion of the
    transaction at the end pf the a. Probable that the economic
    reporting period benefits associated with the
    transaction will flow to the
    business
    b. Amount of the revenue can be
    measured reliably
    04
    MEASUREMENT
    Recognition and Measurement

    ● Contract(s) has been approved in writing, orally or customary


    Step 1 : Identify business practice.
    ● Each party’s rights can be identified.
    the Contract(s) ● The payment terms can be identified.
    with customer ● The contract has commercial substance.
    ● It is probable that the consideration will be collected.

    Step 2: Identify
    Performance obligations are promised goods or the
    services, both explicitly and implicitly by an entity, Performance
    to be transferred to a customer.
    Obligations
    (PO)
    Recognition and Measurement

    Step 3: ● The existence of a significant financing component


    Determine the ● Non-cash consideration
    Transaction ● Consideration payable to a customer
    ● Variable consideration
    Price

    Step 4: Allocate
    ● Allocation based on stand-alone selling prices the Transaction
    ● Allocation of discount
    ● Allocation of variable consideration Price to the
    ● Consider any changes in transaction price Performance
    Obligations
    Recognition and Measurement

    Step 5 : Recognize ● Evaluate whether Performance Obligation is satisfied ‘over


    revenue when an entity time’.
    or as an entity satisfies ● Recognize revenue based on the pattern of transfer to the
    customer.
    Performance ● If not satisfied at the point in time - Recognize revenue when
    Obligations the control transfers.
    05
    CONTRACT
    COST
    CONTRACT COST

    If a business expects to recoup its contract acquisition costs, the incremental


    expenditures must be recorded as an asset. The expenditures that the entity would not have
    incurred if the contract had not been successfully obtained, such as "success fees" paid to
    agents, are the only costs that are considered incremental. The incremental costs of
    acquiring a contract may be expensed under a practical workaround if the corresponding
    amortisation period is 12 months or less.
    Costs incurred to fulfil a contract are recognised as an asset if and only if all of the
    following criteria are met:
    ● the costs relate directly to a contract (or a specific anticipated contract);
    ● the costs generate or enhance resources of the entity that will be used in satisfying
    performance obligations in the future; and
    ● the costs are expected to be recovered.
    06
    PRESENTATION
    AND DISCLOSURE
    An entity should disclose qualitative and quantitative
    information about all of the following:

    ● Its contracts with customers,


    ● The significant judgements, and changes in the
    judgements, made in applying the guidance to those
    contracts, and
    ● Any assets recognized from the costs to obtain or
    fulfil a contract with a customer.

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