Rapid Transport Pty Ltd (RT) has signed a contract to order a new submarine fleet and has stated the fleet will provide considerably faster and safer transportation of goods when compared to ships. The price between RT and the manufacturer is xed and delivery is to occur in 3 years with full payment to be made on delivery. The contract is for $800 million. The manufacturer has agreed that the contract is non-cancellable from their point of view. RT can cancel the contract but must pay a cancellation penalty of $950 million to do so.

Required:

Which two Conceptual Framework elements should RT recognise at the time it enters into the contract? Justify in accordance with the relevant Conceptual Framework denitions and recognition criteria.