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Question - Redrover Dealers Inc. (Redrover) sold a new limited-edition hybrid limousine to Styling Limousines Ltd. (Styling Limousines) on May 10, 2021, for $185,000. As part of the sale, Redrover has included two free oil changes Styling Limousines can use within the first year of purchase and an extended five-year dealership warranty to cover any potential problems that may occur within the first five years of purchase. The dealership has a service department that routinely provides oil changes to clients for $200 per change. It also sells the extended warranty on a stand-alone basis for $20,000.
Required - Describe Redrover's obligations associated with this contract. Explain if each obligation is considered to be a separate (distinct) performance obligation under IFRS 15.
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