Mauer Company follows IFRS and sells consumer-relationship software to Hedges Inc. to be used for three years.

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Mauer Company follows IFRS and sells consumer-relationship software to Hedges Inc. to be used for three years. In addition to providing the software, Mauer promises to provide consulting services over the life of the contract to maintain operability within Hedges’ computer system. The total transaction price is $200,000. Based on stand-alone values, Mauer estimates the consulting services have a value of $75,000 and the software has a value of $125,000. Upon installation of the software on July 1, 2020, Hedges pays $100,000; the contract balance is due on December 31, 2020. Identify the performance obligations and the revenue in 2020, assuming

(a) the performance obligations are interdependent, and

(b) the performance obligations are not interdependent.

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Question Posted: Nov 29, 2019 10:06 AM

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Mauer Company follows IFRS and sells consumer-relationship software to Hedges Inc. to be used for three years.

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The performance obligations relate to the softwaresale and the consulting services The...View the full answer

Intermediate Accounting Volume 1

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