Acca financial Accounting (FA) Study Text ac ca (FA)

Chapter 17 

KAPLAN PUBLISHING

313 

The performance obligation to sell a computer is a performance obligation that 

is satisfied at a point in time – i.e. on 1 December 20X1. Control of the 

computer was transferred to the customer on 1 December so the revenue of 

$300 can be recognised on that date. 

The performance obligation to supply technical support is recognised over a 

period of time – i.e. for 12 months commencing 1 December 20X1. In the year 

ended 31 March 20X2, revenue of $40 (4/12 × $120) should be recognised from 

the provision of technical support. 

As the customer paid $420 immediately, the total recognised as revenue for the 

year ended 31 March 20X2 is $340 ($300 + $40), leaving deferred income of 

$80 (included within current liabilities as at 31 March 20X2).