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3 Based On Iasb Ifrs What Are Your Answers To Question 1 And Question 2 I Need T

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though it is kept in CoAx Warehouse.

2. Based on US GAAP (section 605), is it appropriate to recognize revenue upon transfer of the inventory to the carrier in Transaction 2?

Yes, it is appropriate to recognize revenue upon transfer of the inventory to the carrier. Eventhough has 100% stake in DeliveryAx, they are two different entities. Hence, the revenue can be recognized. It is as per ASC 606, Recognizing revenue when the entity satisfies a performance obligation. Here the obligation is to ship it and it is immaterial if a 100% subsidiary is used for shipping.

ASC 606, Revenue From Contracts With Customers, provides five steps to recognizing revenue; step 5 requires an entity to “recognize revenue when (or as) the entity satisfies a performance obligation.” Describe in general the key principles of this step (and any applicable implementation guidance) that would be relevant to determining how to recognize revenue for the transactions described in this case.

The step 5 recognizes the revenue when the entity satisfies the performance obligation. It is by transferring the ownership of the goods / services or when the customer is in charge of the controls of goods and service.

Transaction 1: It is as per ASC 606, Recognizing revenue when the entity satisfies a performance obligation. Here the obligation is to allocate the delivery to CableCo though it is kept in CoAx Warehouse.

Transaction 2: It is as per ASC 606, Recognizing revenue when the entity satisfies a performance obligation. Here the obligation is to ship it and it is immaterial if a 100% subsidiary is used for shipping

3. Based on IASB IFRS, what are your answers to question 1 and question 2?

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