On 15 June 2015, Dundee Pty Ltd signed a contract to provide market research services to a client for $1 million. The research would be undertaken during the years ended 30 June 2016 and 30 June 2017. Half of the research would be performed in the year ended 30 June 2016 and an amount of $600 000 would be received that year. The remaining half of the research would be performed in the year ended 30 June 2017 and $300 000 would be received. The remaining $100 000 would be received in August 2017. 

The managing director believes that the $1 million should be recognised as revenue in June 2015 because the contract has been signed. The finance director argued that no amount should be recognised in 2015; that $600 000 should be recognised as revenue in the year ending 30 June 2016 and $300 000 in the year ended 30 June 2017; and that the remaining $100 000 should be recognised in August 2017. 

Required

Prepare a report to the board of directors outlining the appropriate treatment for the revenue arising from the research contract.