If a contract modification does not create a separate contract, it is accounted for using either a cumulative catch-up adjustment or a prospective approach. either a retrospective approach or a prospective approach. either a cumulative catch-up adjustment or a retrospective approach. either a cumulative catch-up adjustment, a prospective approach, or a retrospective approach.

If a contract modification does not create a separate contract, it is accounted for using either a cumulative catch-up adjustment or a prospective approach. either a retrospective approach or a prospective approach. either a cumulative catch-up adjustment or a retrospective approach. either a cumulative catch-up adjustment, a prospective approach, or a retrospective approach.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 3Q

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If a contract modification adds distinct goods or services and the contract price increases by an amount that reflects the stand-alone selling price of the added goods or services, then the contract modification should be accounted for By cumulative catch-up method. By prospective method. As a new separate contract. None of these choices.
What are the two basic methods of accounting for longtermconstruction contracts? Indicate the circumstancesthat determine when one or the other of these methodsshould be used.
1. If the forward rate is not at parity during the outset of the contract, which theory of term structures does this violate?
A contract modification always results in a new contract if the modification adds distinct goods or services at a price that reflects their stand-alone selling price. A. True B. False
1. What is the difference between a spot and a forward rate? If the forward rate is not at parity during the outset of the contract, which theory of term structures does this violate?
If the outcome of a long-term contract can be measured reliably, the preferred accounting method under both IFRS and US GAAP is: A . the cost recovery method.
Does contract modification always result in a new contract if the modification adds distinct goods or services at a price that reflects their stand-alone selling price.
If the outcome of a long-term contract can be measured reliably, the preferred accounting method under both IFRS and US GAAP is: B . the completed contract method
When a contract includes an option to buy additional goods or services, when does that option give rise to a performance obligation?
Briefly explain the conditions when a contract modification shall be accounted for as a separate performance obligation.
Compare and contrast the istijrar contract with its closest conventional contract. Whatare the main similarities and differences?
Is variable consideration included in the calculation of a contract’s transaction price? If so, how is the amount of variable consideration estimated?