Question 4 - Part a
In this 17-minute lesson, you'll learn how to handle revenue recognition for gift cards and royalty contracts under IFRS 15 — a common scenario in Strategic Business Reporting exams.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Gift card revenue recognition under IFRS 15
- 1:03 Why gift cards create liabilities not revenue
- 3:11 Accounting for breakage on expired gift cards
- 5:51 Calculating revenue with breakage factor
- 9:23 Royalty contracts and performance obligations
- 13:04 Impairment and loss allowance for bad debts
About this lesson
You'll discover why gift cards are initially recognised as liabilities, how to account for breakage (the portion that expires unused), and how to apply revenue recognition rules when contract circumstances change significantly. The lesson walks through a worked example showing how to structure your answer, apply the standard to the facts, and calculate the revenue impact when a customer's creditworthiness deteriorates, including recognising a loss allowance for expected non-payment.
Duration: 17m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the Strategic Business Reporting course
All 167 video lessons, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in