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Simple guide on the way to Combine Contract

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How to Combine Contract

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Welcome to the Thames Valley branch of APMS for the first webinar in a series focused on NEC-specific topics. Today's session features Richard Patterson from McDonald's, who is leading on drafting NEC documents. Richard brings extensive experience in drafting NEC4 documents and has contributed to numerous publications and projects worldwide. Attendees are encouraged to prepare challenging questions, and a few introductory questions have been prepared. Participants can submit their inquiries through Slido or the control panel during the presentation, and pauses will be made to address questions at specific points. Richard expresses gratitude for attendance and hopes everyone enjoys the session.

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What criteria needs to be met for a contract to exist IFRS 15?

For a contract to fall into the scope of IFRS 15, it must be probable that the entity will collect the consideration to which it will be entitled. Paragraph IFRS 15. BC45 specifies that both the customers ability (i.e. financial capacity) and intent to pay should be taken into account in this assessment.

When should contracts be combined?

Contracts should also be combined if the performance provided under one contract affects the consideration to be paid under another contract. This would be the case when failure to perform under one contract affects the amount paid under another contract.

What is a contract combination?

Combined Contracts means any contracts, arrangements or agreements that apply to the Assets and to any other business or asset of Sellers and their Affiliates. Combined Contracts means contracts between Seller and Customers that include Managed Services and Other Services in the same contract.

How do you bind two contracts?

To make a contract binding, it needs to include several key elements: Offer and acceptance One party needs to offer something (money, services, rights, etc.), and the other party needs to accept the offer. Consideration The benefit that both parties receive. This can be money, services, items, or anything of value.

What is a contract modification in accounting?

A contract modification could change the scope of the contract, the price of the contract, or both. A contract modification exists when the parties to the contract approve the modification either in writing, orally, or based on the parties customary business practices.

What is the criteria for contract combination under IFRS 15?

Contract Combinations under IFRS 15 IFRS 15.17 outlines the criteria for determining when an entity combines two or more contracts and accounts for them as a single contract. The key criteria being Are the contracts entered into at or near the same time with the same customer or related parties of the customer?

What is ASC 606 revenue recognition?

ASC 606 directs entities to recognize revenue when the promised goods or services are transferred to the customer. The amount of revenue recognized should equal the total consideration an entity expects to receive in return for the goods or services.

What is the core principle of IFRS 15 revenue from contracts with customers?

The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

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