Reference no: EM132910108

Question - Nimble Health and Racquet Club (NHRC) is a public company that has 5 clubs and offers one-year memberships. Membership allow access to racquet court and the fitness center including fitness classes. The members may use any of the five facilities but must reserve racquet court times and pay a separate fee before using one of the courts. As an incentive, NHRC allows any customers who are not satisfied for any reason that they can receive a refund of the remaining portion of their unused membership fees. Membership fees are recognized as revenue when received and are due at the beginning of the individual membership period; however, customers have the option of financing the membership fee over the membership period at an interest rate of 7%.

Using the standards from the CPA handed under IFRS 15 identify the contract, performance obligations, measurement criteria, and allocation of the transactions price to the performance obligations in the contract. From the standards recognize the revenue when or as the entity satisfies each performance obligations of the contract and provided a recommendation on the impact of net income.