Joseon Works Co, a property developer, builds a property complex consisting of 50 apartments. Apartments are similar in size and proportion - however, can be adapted to suit client needs. Joseon Works Co enters into a contract with customer #!. The client wants to buy an apartment and agrees to a total price of CU100,000 per apartment. The payment schedule is as follows: - After signing the contract, clients pay a respective deposit of CU 10,000. - Milestone: 1 year before the planned completion, Joseon Works Co will send a progress report to the client and the client will have to pay CU 50,000 each. - Completion: After construction is completed, the legal ownership of the apartment is transferred to the client and they pay the remaining amount of CU40,000 each. The assumed construction period is 2 years from the contract date. Joseon Works Co has the right to withhold payment from any client in the event that that client fails to pay for the contract prior to its completion. There are no other special provisions in the contract with client #1. Based on the above case, how is the revenue recognition of the contract between Joseon Works Co and client #1, whether one time or all of the time, explain?
Joseon Works Co, a property developer, builds a property complex consisting of 50 apartments. Apartments are similar in size and proportion - however, can be adapted to suit client needs. Joseon Works Co enters into a contract with customer #!. The client wants to buy an apartment and agrees to a total price of CU100,000 per apartment. The payment schedule is as follows:
- After signing the contract, clients pay a respective deposit of CU 10,000.
- Milestone: 1 year before the planned completion, Joseon Works Co will send a progress report to the client and the client will have to pay CU 50,000 each.
- Completion: After construction is completed, the legal ownership of the apartment is transferred to the client and they pay the remaining amount of CU40,000 each.
The assumed construction period is 2 years from the contract date. Joseon Works Co has the right to withhold payment from any client in the event that that client fails to pay for the contract prior to its completion. There are no other special provisions in the contract with client #1.
Based on the above case, how is the revenue recognition of the contract between Joseon Works Co and client #1, whether one time or all of the time, explain?
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