Accounting · Revenue Recognition
On 1 December 20X5, TopCo sold specialized manufacturing equipment to LowCorp for $500,000, with payment received immediately. LowCorp requested TopCo to hold the equipment due to space constraints, with the legal title and risks of ownership passing to LowCorp on 1 December 20X5. The equipment is ready for immediate transfer, identifiable as LowCorp's, and TopCo cannot use it. TopCo expects to deliver the equipment on 1 February 20X6. TopCo usually charges a 1% monthly fee for providing custodial services for comparable goods. Under IFRS 15, what is the equipment sale revenue that TopCo should recognize in its Statement of Profit or Loss for the year ended 31 December 20X5?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$501,000
- 2$505,000
- 3$499,000
- 4$500,000✓
Correct answer
$500,000
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