Netalys provides a customer with a weekly office cleaning service for 3 years, for EUR 12,000 per year. Each week of service is distinct and together they form a series treated as a single performance obligation. After 2 years of performance, the customer agrees to extend the contract by 3 years for EUR 9,000 per year, whereas the stand-alone selling price of the service is then EUR 12,500 per year. The service is provided evenly. Compute the annual revenue that Netalys will recognise for each of the remaining years.
- Original contract term
- 3
- Annual price in the original contract
- 12,000
- Years already performed at the modification date
- 2
- Term of the extension
- 3
- Annual price agreed for the extension
- 9,000
- Annual stand-alone selling price of the service at the modification date
- 12,500