Provision for unrealised profits

In this episode, I take you back into IFRS 15 Revenue from Contracts with Customers, but this time we zoom in on one of the trickiest areas: determining the transaction price.I walk you through the key complications: deferred consideration (time value of money), advance payments, and variable consideration. We start with the core principles, then build it up step by step using clear, practical examples — exactly the way you’ll see it in the exam.More importantly, you’ll learn how to turn this knowledge into marks. I show you how to deal with discounting, how to account for financing elements, and how to handle bonuses and penalties using expected value and most likely outcomes.Here’s the thing: this is where students often drop marks. If you’re struggling with how much revenue to recognise and when, this episode gives you a clear method to follow, so you can structure your answer, apply the rules properly, and pick up those easy, valuable marks.Thanks for listening to this episode of ACCA Tom Clendon’s SBR Podcast.If you’d like to view the exam question on screen and see my working, subscribe to the YouTube Channel: https://www.youtube.com/@tomclendonSBR.For access to on-demand support and guidance for your ACCA SBR Journey, visit my website to see my current course offering: https://tomclendon.co.uk/.Chapters(00:00) Introduction – Why transaction price matters for SBR(01:11) Recap of the 5-step revenue model(01:49) Determining the transaction price – key challenges(02:41) Deferred consideration – buy now, pay later(04:32) Time value of money and discounting(05:45) Unwinding the discount (finance income)(06:35) Advance payments – deferred income explained(08:17) Financing element in contract liabilities(09:20) Variable consideration – bonuses and penalties(10:46) Expected value vs most likely method(11:14) Worked example 1 – construction contract (expected value)(16:31) Year 2 adjustment and revenue true-up(17:53) Worked example 2 – service contract (most likely outcome)(21:50) Exam technique and key reminders

In this episode, I walk you through one of the most examinable areas in the exam: revenue under IFRS 15 Revenue from Contracts with Customers. We start right from the basics, so you’re not left guessing, and build up to the core principles that underpin the standard.I talk through the five-step model, explain why revenue is such a high-risk area (especially from an audit perspective), and why simply memorising the steps won’t earn you marks in the exam.More importantly, I show you how to apply that knowledge to a real exam-style question. You’ll see exactly how to identify performance obligations, allocate the transaction price, and deal with timing issues (whether revenue is recognised at a point in time or over time).Thanks for listening to this episode of ACCA Tom Clendon’s SBR Podcast.If you’d like to view the exam question on screen and see my working, subscribe to the YouTube Channel: https://www.youtube.com/@tomclendonSBR.For access to on-demand support and guidance for your ACCA Journey, visit my website to see my current course offering: https://tomclendon.co.uk/.Chapters:(00:00) Why revenue matters for exam success(00:18) Episode overview and learning approach(00:51) Introduction to Zaakirah(01:12) What is revenue and why it’s high risk(01:47) Timing issues and manipulation risks(02:01) Introduction to IFRS 15 Revenue from Contracts with Customers(02:33) The five-step model explained(03:01) Step 1: Identifying the contract(03:18) Step 2: Identifying performance obligations(04:02) Step 3: Determining the transaction price(04:29) Step 4: Allocating the transaction price(05:06) Step 5: Recognising revenue (point in time vs over time)(05:53) Why memorising won’t earn marks(06:26) Moving to exam application(06:40) Understanding the exam requirement (5-mark question)(08:08) Identifying performance obligations in the scenario(10:12) Allocating revenue using stand-alone selling prices(11:20) Timing of revenue recognition(12:19) Calculating correct revenue figure(12:47) Correcting overstated revenue (exam technique)(13:27) Current vs non-current liability (deferred revenue)(13:39) Final exam tips and wrap-up

From Sept 2027 SBR will be no more. The new ACCA exam will be Business and Sustainability Reporting (BSR). This short episode explains what will be the same and what will be different.

Let me make sure you understand the very basic terminology around climate change and S2. Lend me your ears for ten minutes

In this episode I talk to Adam Yannakakis - a recently qualified ACCA member - who is passionate about helping ACCA students by coaching them to be accountable for their studies!

Whilst SBR is core you will also have to choose optional exams. And maybe you should think about doing AFM. In the episode I am joined by Andrew Mower, ACCA's expert AFM tutor and I quiz him about the AFM exam.

Why and how do we make provision for unrealised profits (PUPs) when preparing group accounts! In this episode this is all explained and more!#singleentityconcept#impactonNCI

IFRS 18 is a new standard that is now examinable at SBR. This edition of the podcast gives you an introduction and sets the scene!

IFRS 18 is now examinable at SBR. This podcast sets the scene and gives you an introductory over view of this latest accounting standard. You will learn about the management-defined performance measures (MPMs) and the five categories of income and expenses within the profit or loss.This edition is less than 10 minutes so is not comprehensive and does not include all you need to know.

Lets make sure you understand the basics. Here I talk about IAS 16 Property Plant & Equipment and IAS 40 Investment Property - with an emphasis on explaining about revaluations!