AFM 291Midterm 01 · Field Manual

STANDARD: IFRS 15 / ASPE 3400 / IAS 37

METHOD: REDRAW BLIND · CHECK · FIX

REF: S26 GUIDANCE APPENDIX GOVERNS

DOC MT1-FM · REV C · SHEET 1/5

1 · Five-Step Model

2 · IFRS vs ASPE

3 · TVM + PV Tables

4 · Assets + Contingencies

5 · Changes + Drill

RULE 1: NAME THE FRAMEWORKIFRS or ASPE decides the rule. State it first.

RULE 2: CITE THE CRITERIONThe appendix is open. Point to the page, don't recite from memory.

RULE 3: REDRAW IT BLINDIf you can't draw the model + gate, you don't own it.

ZONE R1

IFRS 15: The Five-Step Model

Guidance p.3–4 · redraw the chain + gate blind

I Identify Contract → P Identify POs → D Determine Price → A Allocate → R Recognize · "INITIAL PERFORMANCE DETERMINES ALLOCATION OF REVENUE"

01

Identify the Contract

5 tests. Collection PROBABLE. No contract → no model.

▶

02

Identify Performance Obligations

Distinct = capable AND in-context. Missed POs lose marks.

▶

03

Determine Transaction Price

Variable? Estimate, then CONSTRAIN. Financing → discount.

▶

04

Allocate Price to Each PO

Relative STAND-ALONE selling price (SSP).

▶

05

Recognize on Transfer of CONTROL

Decision gate below ↓

Step 05
Control
Gate

Over Time: If ANY ONE Holds

① Customer simultaneously RECEIVES + CONSUMES benefits as you perform ② Customer CONTROLS the asset as it is created / enhanced ③ Asset has NO ALTERNATIVE USE + enforceable RIGHT TO PAYMENT for work done to date

B4 backstop, another entity wouldn't substantially re-perform the work done → over time

None Hold → Point in Time (default)

Recognize at the moment control transfers. △ indicators (general IFRS 15, not in appendix): physical possession · legal title · risks + rewards · acceptance · present right to payment.

Billing / invoice date ≠ revenue. Control + performance drive recognition.

STEP NOTES

The Testable Detail Behind Each Step

This is where the marks actually sit

01 · Contract: All 5

Approved (written / oral / customary) · Rights identifiable · Payment terms identifiable · Commercial substance · Collection probable. Fail any → no contract under the model.

02 · Distinct: Need BOTH

Capable of being distinct, usable alone or with readily available resources. Distinct in context, separately identifiable; no significant integration / modification / customization; not highly interdependent. Series of substantially-same goods with same transfer pattern = one PO.

03 · Transaction Price

Variable, expected value (many similar outcomes) vs most likely (two outcomes). CONSTRAIN: include only if highly probable NO significant reversal. Also: significant financing (→ discount, Sheet 3) · non-cash · consideration payable to customer.

04 · Allocate

Split the price on a relative SSP basis where SSP is available. (SSP defined under ASPE A9: Sheet 2: best evidence is the observable separate-sale price; a list price is not presumed to be SSP.)

MT1-FM · REV C · ISSUED 06.2026

REDRAW IT BLIND OR YOU DON'T OWN IT

AFM 291Revenue · Framework Split

STANDARD: IFRS 15 vs ASPE 3400

CORE SPLIT: CONTROL vs RISKS + REWARDS

METHOD: ONE CONTRACT, BOTH WAYS

DOC MT1-FM · REV C · SHEET 2/5

1 · Five-Step Model

2 · IFRS vs ASPE

3 · TVM + PV Tables

4 · Assets + Contingencies

5 · Changes + Drill

WHITE = IFRS ASH = ASPE BLACK = TRIGGER / OUTCOME △SUPPLEMENTS THE APPENDIX SAME CONTRACT: DIFFERENT TRIGGER. KNOW WHERE + WHY THEY DIVERGE.

ZONE R2

IFRS 15 vs ASPE 3400: Line by Line

Guidance p.3–6 · the first row decides everything downstream

Axis

IFRS 15

ASPE 3400

Core Trigger

Transfer of CONTROL

Risks + Rewards transferred + collection assured

Model

5-step model, applied per performance obligation

Performance satisfied · measurable reliably · collection assured. (+ persuasive evidence · delivery · price fixed/determinable)

Distinct Unit

Distinct performance obligations (capable + in-context)

Separate units of account, stand-alone value + (if right of return) remaining delivery probable & in vendor's control

Allocate

Relative SSP

Relative SSP, same basis (A9)

Variable Price

Expected value / most likely, then constrain (no significant reversal)

Price must be fixed or determinable

Timing

Over time (3 criteria) or point in time (default)

Delivery / performance; long-term → % completion (default) or completed contract

Long-Term Loss

Onerous contract → recognize expected gross loss

Expected loss → recognize the ENTIRE loss immediately, regardless of % complete

Financing

Significant financing component → discount to PV (Sheet 3)

No 3400 detail; deferred → note receivable (S.3856); below-market → PV at market rate

Warranty

Assurance vs service: B28–B30 (gate below)

No warranty guidance in the appendix

ASPE

3400 Mechanics You Must Carry

The detail IFRS folds inside the 5-step model

Long-Term Contracts

% of completion, relate revenue to work done (default when progress is estimable). Completed contract ONLY when performance is a SINGLE ACT or progress CAN'T be reliably estimated (.18).

Expected Losses

Probable total costs > total revenue → recognize the ENTIRE expected loss NOW. Irrespective of: work commenced · degree of completion · profits on other contracts.

Multiple Deliverables

Separate unit of account if BOTH: (a) if a general right of return, remaining delivery is probable + substantially in the vendor's control; (b) the deliverable has stand-alone value to the customer.

SSP (A9) & Deferred Pay

SSP = price sold separately; best evidence = observable separate-sale price; a list price is NOT presumed to be SSP. Deferred / below-market (S.3856) → receivable at PV at a market rate.

ZONE R3

Warranty Decision: IFRS B28–B30

Guidance p.4 · one pivot, separately purchasable?

Warranty: Performance Obligation or Provision?

Can the customer purchase the warranty SEPARATELY?

YES → B29 Distinct service → it's a PERFORMANCE OBLIGATION. Allocate part of the price; recognize over the service period.

NO → B30 Account under IAS 37, provision. UNLESS it provides a service beyond assurance (then that part is a PO).

Assurance-type = product meets agreed specs (provision). Service-type = something extra the customer could buy alone (performance obligation).

Blind Drill: R2 Table

Reproduce the 9-row split from blank.

Reps

Drill: take ONE contract with a bundled warranty + a financing term, solve it under IFRS, then ASPE. Mark every line where the answers split.

MT1-FM · REV C · ISSUED 06.2026

CONTROL vs RISKS + REWARDS

AFM 291Time Value of Money

SCOPE: FINANCING + DEFERRED PAYMENT

TOOLS: PVF (SINGLE SUM) · PVFA (ANNUITY)

RULE: DISCOUNT AT A MARKET RATE

DOC MT1-FM · REV C · SHEET 3/5

1 · Five-Step Model

2 · IFRS vs ASPE

3 · TVM + PV Tables

4 · Assets + Contingencies

5 · Changes + Drill

ZONE T1

When & How to Discount

Guidance p.3 (IFRS) · p.6 (ASPE 3856)

IFRS: Significant Financing Component

Does payment timing differ significantly from transfer?

YES → FINANCE Use the cash-equivalent price: discount the consideration to PV. Revenue = PV; the rest is interest income over time.

NO Recognize the stated amount, no financing adjustment.

Step 3(b) of the 5-step model. The gap between nominal and PV is interest, not sales revenue.

ASPE: Deferred Payment (S.3856)

Is the interest rate offered BELOW market?

YES → DISCOUNT Record the receivable at the PV of cash flows using a market rate. Difference unwinds as interest.

NO Receivable at face, rate is already at market.

3400 has no IFRS-style financing rule; the receivable falls under Section 3856.

WHICH TABLE? ONE FUTURE AMOUNT → PVF (SINGLE SUM) · EQUAL PAYMENTS EACH PERIOD → PVFA (ORDINARY ANNUITY) · PV = CASH FLOW × FACTOR

ZONE T2

Worked Examples: Navigate the Tables

Illustrative figures · method + PV factors from the appendix

EX 1: Single Sum

IFRS · SIG. FINANCING

Jan 1: sell equipment; customer pays $100,000 in 3 years, no interim payments. Cash price not separately observable. Market rate 8%.

1

Significant financing → discount to the cash-equivalent price.

2

One future amount → use PVF. Look up n=3, r=8% → 0.7938

3

Revenue at delivery = $100,000 × 0.7938.

4

Interest income = $100,000 − $79,380, earned over 3 yrs.

REVENUE $79,380 · INTEREST INCOME $20,620 OVER 3 YRS

Watch: don't book the full $100,000 as revenue at delivery, the $20,620 gap is interest, recognized over the term (effective interest).

EX 2: Annuity

ASPE · S.3856

Sell goods; customer pays $10,000 / year for 4 years (each year-end). Rate offered is below market. Market rate 10%.

1

Below-market deferred terms → receivable at PV at the market rate.

2

Equal payments → use PVFA. Look up n=4, r=10% → 3.1699

3

Receivable / revenue at sale = $10,000 × 3.1699.

4

Interest income = $40,000 nominal − $31,699 PV, over 4 yrs.

RECEIVABLE / REVENUE $31,699 · INTEREST $8,301 OVER 4 YRS

Watch: the $40,000 nominal is not revenue: PV is the measure. Using PVF instead of PVFA here is the classic error.

ZONE T3

PV Factor Quick-Reference

High-use subset · full tables in appendix (2–15% · n=1–12)

PVF: Single SumPV = FV × factor

n	6%	8%	10%	12%
1	0.9434	0.9259	0.9091	0.8929
2	0.8900	0.8573	0.8264	0.7972
3	0.8396	0.7938	0.7513	0.7118
4	0.7921	0.7350	0.6830	0.6355
5	0.7473	0.6806	0.6209	0.5674

PVFA: Ordinary AnnuityPV = CF × factor

n	6%	8%	10%	12%
1	0.9434	0.9259	0.9091	0.8929
2	1.8334	1.7833	1.7355	1.6901
3	2.6730	2.5771	2.4869	2.4018
4	3.4651	3.3121	3.1699	3.0373
5	4.2124	3.9927	3.7908	3.6048

MT1-FM · REV C · ISSUED 06.2026

PV IS THE MEASURE: THE GAP IS INTEREST

AFM 291Recognition · Contingencies

STANDARD: FRAMEWORKS / IAS 37 / ASPE

SIGNATURE: THE PROBABILITY LADDER

METHOD: RUN FACTS THROUGH THE GATE

DOC MT1-FM · REV C · SHEET 4/5

1 · Five-Step Model

2 · IFRS vs ASPE

3 · TVM + PV Tables

4 · Assets + Contingencies

5 · Changes + Drill

ZONE A1

Asset Criteria & Recognition

Guidance p.2 · definition first, then recognition

ASSET = 3 TESTS · FAIL ANY ONE → NOT AN ASSETIFRS ≈ ASPE

Test

IFRS

ASPE

①Benefit

A RIGHT with the potential to produce economic benefits / future cash flows

Future benefit contributing (directly / indirectly) to future net cash flows

②Control

The right is controlled by the entity

Entity can control access to the benefit

③Past Event

Control arose from a past event

The transaction / event has already occurred

Recognition: Can It Go On The Statements? (applies to assets & liabilities)

IFRS

Produces relevant information + a faithful representation. Relevance ← probability of in/outflow. Faithful rep ← measurement uncertainty. Routed through the qualitative characteristics.

ASPE

(1) Appropriate basis of measurement + a reasonable estimate of the amount; AND (2) probable the future benefits are obtained / given up. Two standalone criteria.

BOTH FRAMEWORKS ASK THE SAME TWO QUESTIONS: ① IS THE BENEFIT LIKELY? ② CAN YOU MEASURE IT? IFRS ROUTES THEM THROUGH THE QUALITATIVE CHARACTERISTICS; ASPE STATES THEM OUTRIGHT.

⊕ Probability Ladder: The Words + The Thresholds

LESS CERTAIN ───────────────► MORE CERTAIN

IFRS

Remote

Possible

Probable

Virtually Certain

do NOTHING

▲ DISCLOSE (not remote)

▲ LIABILITY: PROVIDE
asset: disclose

▲ ASSET: RECOGNIZE

ASPE

Unlikely

Not Determinable

Likely

ASYMMETRY A liability is recognized at PROBABLE, but an asset only at VIRTUALLY CERTAIN. Bad news books easier than good news. Never mix the IFRS words (probable / possible / remote) with the ASPE words (likely / not determinable / unlikely).

ZONE C1

IFRS Provisions & Contingent Liabilities: IAS 37

Guidance p.9 · YES drops down · NO branches right

OUTCOMES: PROVIDE DISCLOSE CONTINGENT LIABILITY DO NOTHING

GATE 1

Present obligation from a past (obligating) event?

NO ▶ Possible obligation? NO → DO NOTHING YES → go to the REMOTE test (Gate 2 NO branch)

▼ YES

GATE 2

Probable outflow of resources?

NO ▶ Remote? YES → DO NOTHING NO → DISCLOSE

▼ YES

GATE 3

Reliable estimate of the amount?

NO (rare) ▶ DISCLOSE CONTINGENT LIABILITY

▼ YES

███ PROVIDE, recognize the provision ███

ZONE C2

Contingent Assets (IFRS) & Contingent Losses (ASPE)

Guidance p.9–10 · note the asymmetry + the vocabulary

IFRS asset · VIRTUALLY CERTAIN

▶

RECOGNIZE, not contingent

IFRS asset · PROBABLE (not virt. certain)

▶

DISCLOSE only, no asset

IFRS asset · NOT PROBABLE

▶

NO asset · NO disclosure

ASPE Contingent Loss: Measure ↓ / Probability →	Likely	Not Determinable	Unlikely
Measurable: can estimate	Accrue / Recognizedisclose excess exposure	Disclose	No accrualno disclosure
Not Measurable: cannot estimate	Disclose	Disclose	No accrualno disclosure

MT1-FM · REV C · ISSUED 06.2026

BAD NEWS BOOKS EASIER THAN GOOD NEWS

AFM 291Changes · Events · Error Rehab

STANDARD: CHANGES / SUBSEQUENT EVENTS

NOTE: IFRS & ASPE SIMILAR HERE

METHOD: EVERY LOST MARK = A ROW

DOC MT1-FM · REV C · SHEET 5/5

1 · Five-Step Model

2 · IFRS vs ASPE

3 · TVM + PV Tables

4 · Assets + Contingencies

5 · Changes + Drill

ZONE J1

Changes: Estimate / Policy / Error

Guidance p.7 · the trap is the treatment, not the framework

Change in Estimate

→ PROSPECTIVE

Amounts subject to measurement uncertainty, revised for new information / developments / experience. Apply going forward, no restatement.

Eyes Forward

Change in Policy

→ RETROSPECTIVE

Voluntary change allowed only if it gives reliable + more relevant information. Restate prior periods as if always applied.

Look Back

Prior Period Error

→ RETRO. RESTATEMENT

Omission / misuse of reliable info that was available (incl. math errors, misapplied policy, fraud). Fix + re-present prior periods.

Look Back

ESTIMATE = EYES FORWARD (PROSPECTIVE) · POLICY + ERROR = LOOK BACK (RETROSPECTIVE) · ONLY NEW INFO EARNS "PROSPECTIVE"

ZONE J2

Subsequent Events: Adjust or Disclose?

Guidance p.7–8 · test = when the condition arose

Subsequent Events Gate

Did the CONDITION exist at period-end?

YES → ADJUSTING Provides evidence of a condition that existed at period-end → ADJUST the financial statements.

NO → NON-ADJUSTING New condition arising after period-end → DISCLOSE if material.

Window: period-end → authorized for issue (IFRS) / completion of F/S (ASPE). Decide by WHEN THE CONDITION AROSE, not when you learned it.

Non-Adjusting: Disclose What?

For a material non-adjusting event:

DISCLOSE The nature of the event; and an estimate of its financial effect, or a statement that an estimate cannot be made. Plus the date authorized for issue (IFRS).

Disclosure is in the notes, the numbers on the face of the statements do not change.

ZONE J3

Where Marks Die

Tied to guidance pages · mine each into a row below

01Framework Swapp.3 / p.5

IFRS = control · ASPE = risks + rewards. Name it first or the whole answer drifts.

02Half a Distinct Testp.3 §2

Capable AND distinct-in-context. Integration / customization kills the split.

03Constraint Skippedp.3 §3a

Estimate variable consideration, then constrain, only if a significant reversal is highly improbable.

04Wrong Probability Wordp.9–10

IFRS: probable / possible / remote (+ virtually certain). ASPE: likely / not determinable / unlikely. Don't mix.

05Booked Good News Earlyp.10

Liability books at probable; an asset needs virtually certain. ASPE gains never accrue.

06Loss Proratedp.10 / p.6

Onerous / expected loss = the ENTIRE loss NOW, not by % complete.

07Wrong Change Treatmentp.7

Estimate forward; policy + error back (restate). Easy to flip under pressure.

08Event Misclassifiedp.7–8

Classify by when the condition existed, not when you found out.

09List Price = SSPp.6 A9

A stated / list price is NOT presumed to be the stand-alone selling price.

10Billing = Revenuep.4 / p.5

Invoice / cash timing doesn't drive recognition, control / performance does.

11Warranty Assumed a POp.4 B29/30

Only a PO if separately purchasable (B29); otherwise IAS 37 provision (B30).

12Completed-Contract Defaultp.6 .18

% completion is the default; completed contract only for a single act or when progress can't be estimated.

ZONE J4

Error Log + Rehab Protocol

Practice problem missed → a row before any new study

01

Skim: 10′

Skim the appendix page for the red topic. Skim, not study.

02

Execute: 30–40′

Solve problems · redraw the gate / model blind · check.

03

Quiz: 10′

Test page-closed. Misses → rows below.

04

Encode: 5′

Write 3–5 recall cards from the misses.

⊘

Standing Order

Every lost mark = a row. Redo on date +3. This table outranks new material.

DAILY, log every miss as it happens · 1 row each (date · topic · rule).

+3 DAYS, redo each row page-closed. Clean redo → tick the box.

WEEKLY (SUN), re-test all still-open rows + worst Blind Drills.

Date	Topic / Question	What I Did	Why Wrong	Rule to Remember	Redo +3	✓

Minimum Viable Rep

ONE STRUCTURE REDRAWN BLIND + ONE PROBLEM SOLVED + ONE ROW LOGGED = DAY HELD

NAME THE FRAMEWORK · CITE THE CRITERION · RUN THE FACTS THROUGH THE GATE: THE APPENDIX IS A TOOL, NOT A TEACHER

BORING IS WINNING

MT1-FM · REV C · ISSUED 06.2026

FRAME BEFORE YOU RESOLVE