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When should wdl recognise revenue from the contract

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Reference no: EM132508764

Wood Delights Ltd (WDL) manufactures office furniture. WDL enters into a contract with Castor Ltd (Castor) to manufacture several desks. The contract includes the following terms:

  1. Castor can cancel the contract at any time (with a termination penalty) and any work-in-progress remains the property of WDL;
  2. the work-in-progress can be completed and sold to another customer if the contract is cancelled;
  3. physical possession and legal title do not pass until completion of the contract; and
  4. a deposit is collected at the outset of the transaction, but the majority of the payments are due after the desks have been delivered.

Required

Question 1: Applying AASB 15, when should WDL recognise revenue from this contract?

Reference no: EM132508764

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