Section A

SolarTech PLC manufactures solar panels. During the year, they introduced a 2% early settlement discount for customers who pay within 10 days. A customer purchases panels with a list price of $50,000. SolarTech expects the customer to take the discount. Under IFRS 15, how much revenue should SolarTech recognize at the point of sale?

According to IFRS 15 Revenue from Contracts with Customers, variable consideration (such as an early settlement discount) should be estimated and included in the transaction price only to the extent it is highly probable that a significant reversal will not occur. If SolarTech expects the customer to take the 2% discount, revenue is recognized net of the discount: $50,000 - ($50,000 * 2%) = $49,000.