Reference no: EM132912601

Business Systems Pty Ltd is a business software development house.

• It customizes and installs business software on customers computer systems. It also offers, from the date of installation, on-going service for help desk maintenance of the customized software including upgrades.
• Enquiries were received from a customer, RSH Ltd. Technicians of Business Systems Ltd visited the premises of RSH Ltd on 1 March 2019 and provided a quote of $2,400,000 for customized software and a subsequent 12-month help desk maintenance agreement.
• The agreed terms for payment were 10% upon acceptance of a quote, 80% within 30 days of installation and the balance of 10% at the end of a 12-month period of help desk maintenance.
• RSH Ltd accepted the quote and paid a deposit of 10% of the quoted price on 30 April 2019. The software was then written and tested, which took 2 months. The tests proved satisfactory and the customized business software was installed on the computers of RSH Ltd on 30 June 2019.
• Payment of 80 per cent of the quoted price was received from RSH Ltd on 31 July 2019.
• On completion of a further 12 months help desk support to maintain the software, the final 10% of the quoted price is due to be paid by RSH Ltd on 30 June 2020.

Required

Problem 1: Apply the criteria of the AASB 15 Revenue from contracts with Customers to explain what may be recognised by Business Systems Ltd as income for the year ended 30 June 2019 and 30 June 2020.