Question

Pls do not handwritten for easy reading
Question:-
Noel Gifts International Ltd("Noel') Annual Report for the year ending 30 June 2018 available from S&P Capital IQ platform. You should have already created an account an account on the S&P Capital IQ platform from your earlier courses. Also, note that the questions make reference to Singapore Financial Reporting Standards(FRS).
a) Explain Noel's current revenue recognition policy and discuss the company's status with regards to the application of FRS115 Revenue from Contracts with customers

b) list the types and amounts of revenue that Noel had recognized and the amount that had been deferred as a liability, Explain what this indicates about Noel's cash flow in relation to revenue recognition. Please also provide a screenshot from S&P Capital IQ platform to verify the total revenue in the financial report statement

c) Discuss the requirement of FRS115 if a customer and the customer's subsidiary company both entered into various sales contracts with Noel at about the same time to make bulk purchases of hampers and gifts for the Chinese New Year season.

Answer 1

a) After January 1st 2018 FRS 115 establishes principles on the nature,amount,timing,uncertainty of revenue and cash flows arising from an entity's contracts with the customers.

Under FRS 115 An entity recognises revenue in accordance with that core principle by applying the 5 step revenue recognition model

• Step-1: Identify the contract(s) with the customers.
• Step 2: Identify the seperate performance obligations in the contract.
• Step3: Determine the transaction price.
• Step4: Allocate the transaction price to the separate performance obligations.
• Step5: Recognise Revenue when the entity satisfies a performance Obligation

c) Identify the performance obligations in the contract: includes promises for transfer goods or services to a customer in exchange for consideration stated in the contract.If the goods are distinct in nature ,the performance obligations will be accounted separately.a good or service is considered distinct  if the customer can benefit from the good or service individually or in tandem with other resources that are readily available to the customer.The transaction price is the contractual consideration that an entity expects to receive in exchange for the trasference of the promised goods or services to the customers.If there is a variable consideration ,the entity makes an estimate on the entitled amount of consideration for the goods promised or services delivered.

b) Some information is missing in point b.Financial report is not produced in the question.so it can't be answered.