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MOUNTAIN VIEW COLLEGE
SCHOOL OF BUSINESS AND ACCOUNTANCY
ACCOUNTING FOR SPECIAL TRANSACTIONS
WORKSHEET#7: IFRS 15 – REVENUE FROM CONTRACTS WITH CUSTOMERS
INSTRUCTIONS: Answers and all necessary solutions to the requirements must be written in a clean
sheet of paper (all in good form). Submission format must be image file(png or
jpeg) or pdf file.
PROBLEM #1 - Revenue Recognition at a Point in Time
On July 1, 20x6, AA Company, a real estate developer, sold a parcel of land to a construction company
forP3,000,000. The book value of the land on AA's books was P1,200,000. Terms of the sale required a down
payment of P150,000 and 19 annual payments of P150,000 plus interest at an appropriate interest rate due on each
July 1 beginning in 20x7.
Required: How much revenue will AA recognize for the sale (ignoring interest), assuming that it recognizes
revenue at the point in time at which it transfers the land to the construction company?
