Company X, Y and Z are within the same Group. The have the same Ultimate Shareholder.
Company X has an investment management agreement with Company Y. At the end of the year, performance obligation was satisfied.
However, the ultimate shareholder has instructed Company Y to pay the investment management fee to Company Z directly instead of Company Y.
Company Z will not have to reimburse this amount in the future.
Can Company Z account the investment management fee as revenue or Should it be accounted as a capital contribution (equity)?
On a separate note, Company Z does not have any investment manager licence and have no agreement with Company X & Company Y.
Revenue IFRS 15
Re: Revenue IFRS 15
Is X the parent company of Z?
Re: Revenue IFRS 15
X is a Subsidiary as well.
The Ultimate Shareholder is an individual.
The Ultimate Shareholder is an individual.
Re: Revenue IFRS 15
Is there a parent company above XY and Z, or just the individual owning all 3?
Re: Revenue IFRS 15
The individual owns all the 3 entities.
Re: Revenue IFRS 15
Ok well at it's simplest, X recognizes revenue because it has a contract and it has fulfilled it. Y has expenses.
X has effectively received payment and made a loan to Z. Either that or the debt has formally been transferred to Z.
Depends what the paperwork/minutes/documents say. Otherwise, there are various ways it could be presented.
X has effectively received payment and made a loan to Z. Either that or the debt has formally been transferred to Z.
Depends what the paperwork/minutes/documents say. Otherwise, there are various ways it could be presented.
Re: Revenue IFRS 15
PS I don't think the issue of the payment arrangements is anything to do with revenue.