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Chapter 15

Note that, when applying the five-step approach, revenue will be
recognised on one of two bases:

 over a period of time – this is likely to apply for the provision of
services when there is simultaneous provision and consumption of
a service, or

 at a point in time – this is likely to apply for the sale of goods
when transfer of control can be determined at a specific point in
time.

Tutor notes guidance – discussion points

Ensure that students understand the five-step approach to revenue

recognition. It may help to apply the five-step approach to basic contract law
principles.

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