CERTYNEX IFRS ACADEMY

Nuvola signs a 24-month data hosting contract with a customer, for a monthly fee of EUR 1,000, and charges a non-refundable set-up fee of EUR 6,000. The set-up consists of internal configuration tasks that transfer no good or service to the customer. The contract may then be renewed each year at the same monthly fee, without any new set-up fee; Nuvola has concluded (professional judgement) that this renewal option provides the customer with a material right. How does Nuvola account for the set-up fee?

As revenue on invoicing, since the fee is non-refundable.

As revenue over the 24 months of the initial term, without further consideration.

As an advance payment for future hosting, recognised as revenue as the services are provided, over a period beyond the 24 months.

As the price of a distinct set-up performance obligation, satisfied when Nuvola's teams complete the internal technical configuration.