Allocating the transaction price

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  54,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · COLD_ROOM · 48,000 · OBSERVABLE_PRICE | PO_2 · INSTALLATION · 4,000 · EXPECTED_COST_PLUS_MARGIN | PO_3 · MAINTENANCE · 8,000 · OBSERVABLE_PRICE

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 1

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

• Likelihood of exercise of the option (%)

  Number

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  54,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  43,200

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  54,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  54,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · COLD_ROOM · 48,000 · OBSERVABLE_PRICE | PO_2 · INSTALLATION · 4,000 · EXPECTED_COST_PLUS_MARGIN | PO_3 · MAINTENANCE · 8,000 · OBSERVABLE_PRICE

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 2

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

• Likelihood of exercise of the option (%)

  Number

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  54,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  3,600

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  54,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  54,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · COLD_ROOM · 48,000 · OBSERVABLE_PRICE | PO_2 · INSTALLATION · 4,000 · EXPECTED_COST_PLUS_MARGIN | PO_3 · MAINTENANCE · 8,000 · OBSERVABLE_PRICE

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 3

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

• Likelihood of exercise of the option (%)

  Number

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  54,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  7,200

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  54,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  300,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · LICENCE · 300,000 · OBSERVABLE_PRICE | PO_2 · MATERIAL_RIGHT · 20,000 · ESTIMATE_B42

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 1

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

  25,000

• Likelihood of exercise of the option (%)

  Number

  80 %

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  300,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  20,000

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  281,250

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  300,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  300,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · LICENCE · 300,000 · OBSERVABLE_PRICE | PO_2 · MATERIAL_RIGHT · 20,000 · ESTIMATE_B42

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 2

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

  25,000

• Likelihood of exercise of the option (%)

  Number

  80 %

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  300,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  20,000

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  18,750

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  300,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  5,640,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · CUSTOM_LINE · 5,000,000 · EXPECTED_COST_PLUS_MARGIN | PO_2 · MAINTENANCE_4_YEARS · 1,000,000 · OBSERVABLE_PRICE

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 1

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

• Likelihood of exercise of the option (%)

  Number

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  5,640,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  4,700,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  5,640,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Transaction price to allocate (from “Determining the transaction price”)

  NumberRequired

  5,640,000

• Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4)

  TableRequired

  PO_1 · CUSTOM_LINE · 5,000,000 · EXPECTED_COST_PLUS_MARGIN | PO_2 · MAINTENANCE_4_YEARS · 1,000,000 · OBSERVABLE_PRICE

  Stand-alone selling prices that are not observable are the entity's estimates, maximising the use of observable inputs (para. 78); the standard imposes no amount.

• Obligation whose share of the price is detailed

  ChoiceRequired

  Performance obligation 2

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Number

• Discount allocated to a subset of obligations

  Number

• Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price)

  Table

• Obligation of the subset whose share of the discount is detailed

  Choice

  Performance obligation 1 / Performance obligation 2 / Performance obligation 3 / Performance obligation 4

• Discount obtained by exercising the option, less the discount available without exercising it (total expected amount)

  Number

• Likelihood of exercise of the option (%)

  Number

  The entity's estimate (exercise history, for example), never set by the standard (para. B42).

• Change in the transaction price after inception (cause, amount, obligations concerned)

  Text

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IFRS 15 §73IFRS 15 §74IFRS 15 §75IFRS 15 §76IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Determining stand-alone selling prices

  ChecklistRequired

  • Objective: allocate to each obligation the consideration expected for its transfer, in proportion to stand-alone selling prices save for exceptions
  • Contract with a single obligation: no allocation (except variable consideration relating to a series)
  • Prices determined at contract inception
  • Best evidence: observable price of separate sales in similar circumstances; a contractual or list price is not presumed to be one
  • Otherwise, estimate maximising observable inputs: adjusted market assessment approach, expected cost plus a margin approach, residual approach
  • Residual approach limited to highly variable or uncertain prices; combination of methods possible

IFRS 15 §81IFRS 15 §82IFRS 15 §83IFRS 15 §84IFRS 15 §86

• Allocation of the discount

  Checklist

  • Discount: sum of stand-alone selling prices exceeds the promised consideration; allocated to all obligations by default
  • Allocation to a subset only if the three conditions of observable evidence are met (regular separate sales, bundle sold at a substantially identical discount)
  • Discount allocated to the subset before using the residual approach
  • Variable consideration may relate to the whole contract or to part of it; remainder allocated under the general rule

  This workpaper does not restate the conditions for allocating variable consideration entirely to a single obligation.

• Allocation of the discount retained

  Choice

  All obligations, proportionately / A subset, on observable evidence / Not applicable: no discount

IFRS 15 §B40IFRS 15IFRS 15 §B43

• Analysis of the option

  Checklist

  • Material right the customer would not receive without entering into the contract (discount beyond the usual discounts): performance obligation
  • Revenue for the option recognised when the future goods or services are transferred or when the option expires
  • Stand-alone selling price not observable: discount obtained, adjusted for the discount available without the option and for the likelihood of exercise
  • Similar future goods provided under the original terms (renewals): allocation possible by reference to the goods expected and the corresponding consideration

IFRS 15 §87IFRS 15 §90

• Analysis of the change

  Checklist

  • Change due to the resolution of uncertain events or other changes in circumstances
  • Change after a modification: allocation according to the treatment retained for the modification

  This workpaper does not restate the general rules for allocating a change in the price; describe the change and its treatment.

IFRS 15 §74IFRS 15 §76IFRS 15 §79IFRS 15 §82IFRS 15

• Stand-alone selling price estimated under the residual approach (transaction price − observable prices of the other items)

  Calculation

  5,640,000

  Transaction price to allocate (from “Determining the transaction price”) ; − Sum of the observable stand-alone selling prices of the other goods or services (residual approach)

  Approach permitted only if the price of the item is highly variable or uncertain (para. 79); carry the result into the stand-alone selling price table.

• Estimated stand-alone selling price of the option (incremental discount × likelihood of exercise)

  Calculation

  Discount obtained by exercising the option, less the discount available without exercising it (total expected amount) ; Likelihood of exercise of the option (%)

  Carry the result as the row of the option in the stand-alone selling price table (para. B42).

• Share of the transaction price allocated to the obligation detailed

  CalculationRequired

  940,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

  Allocation in proportion to stand-alone selling prices (para. 74 and 76). The row key must match the obligation chosen. If a discount is allocated to a subset (para. 82), enter for those obligations their price net of their share of the discount calculated below (teaching presentation assumption).

• Total allocated to the obligations

  CalculationRequired

  5,640,000

  Transaction price to allocate (from “Determining the transaction price”) ; Stand-alone selling prices at inception (one row per obligation, key PO_1 to PO_4) ; Obligation whose share of the price is detailed

• Share of the discount allocated to the obligation of the subset detailed

  Calculation

  Discount allocated to a subset of obligations ; Obligations of the subset to which the discount relates (key PO_1 to PO_4, stand-alone selling price) ; Obligation of the subset whose share of the discount is detailed

IFRS 15 §77IFRS 15 §78IFRS 15 §79IFRS 15 §80

• Method of determination retained

  JudgmentRequired

  Combination of methods

  Observable prices for all obligations / Adjusted market assessment approach / Expected cost plus a margin approach / Residual approach (highly variable or uncertain price) / Combination of methods

  The method and data retained (margin, market adjustments) are documented choices of the entity; the standard mentions suitable methods without imposing them (para. 79).

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The method of determination is documentedPass
• The transaction price is fully allocatedPass
• The allocation is calculatedPass

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0