ACCA · Question 26 · Revenue from Contracts with Customers
SECTION B - CASE 3: FinServe Solutions
FinServe Solutions Co is a fintech payment processor. The year-end is 31 March 20X7.
On 1 April 20X6, FinServe signed a 3-year contract with a major retailer to process their payments. FinServe charged a non-refundable upfront setup fee of $120,000 to integrate the retailer's systems with FinServe's platform. The integration does not transfer a distinct good or service to the retailer. FinServe also charges a 1% fee on all transactions processed.
How should the $120,000 setup fee be recognized in the statement of profit or loss for the year ended 31 March 20X7?
Answer options:
$120,000
$40,000
$0
$80,000
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