Understand how variable consideration and other aspects of contracts affect the calculation and allocation of the transaction price.

Q: Define the term Approval of payment requests?

A: The payment is an amount of money paid by the customer to the seller in exchange of goods and…

Q: Define forward contract.

A: It is a form of derivative contract which is used as an agreement

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: Allocate a contract’s transaction price to multiple performance obligations.

A:

Q: 1. A company enters into a contract with a customer to sell Products AA, Baba, and Kaka in exchange…

A: Transaction price of a contract will allocate in the ratio of observable standalone price of all…

Q: Explain the accounting for contract modifications.

A: Contract modification may occur when any addition, change or cancellation of specific terms and…

Q: Explain how the lower of cost and net realizable value rule is applied to purchase commitments.

A: Purchase Commitments: It refers to the commitments or contract made by a company with its suppliers…

Q: Which of the following should be avoided in a contract if cost certainty is important?…

A: Several options have been proposed as the clause that should be avoided in a contract if cost…

Q: Define the term Contract Modifications.

A: Accounting: Accounting is an art of collecting, recording, summarizing and presenting the financial…

Q: How is the contract-based approach (IFRS) and the earnings approach (ASPE) used for allocating the…

A: The contract-based approach, as defined in IFRS 15 (Revenue from Contracts with Customers), is a…

Q: Explain Pass-Through Rates, Yields, and Servicing Fee?

A: Pass-through rateA rate of interest being paid to the investors on the securitized asset after…

Q: Briefly describe the fair value hierarchy.

A: Fair value: A value which is determined based on the market situation, business demand, and the…

Q: how payment or performance extinguishes an obligation.

A: An obligation arises when an agreement made between parties satisfies all the necesaary conditions…

Q: What is a forward contract?

A: Introduction: This question is related to the concept of financial derivatives. Derivative…

Q: How do fixed asset systems differ from purchases systems?

A: Definition: Purchase system: The identification and procurement of the inventory needs for the…

Q: Distinguish between par value and issue price.

A: Solution: Par value is a value assigned to a financial instrument issued by the company. It is…

Q: What Is Fixed-Price Contract with Redetermination?

A: A fixed-price contract with prospective price redetermination provides for-       (a) A firm fixed…

Q: What Is Cost-Based Contracts?

A: Cost plus contracts is defined as an agreement for reimbursement of the company regarding an…