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Dear Brodie, Thank you for your phone call this morning

Accounting

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Dear Brodie, Thank you for your phone call this morning. As agreed I am emailing your regarding the accounting issues we briefly discussed. By the way to assist the accounting team in our decision-making process, could you please make sure you reference any relevant sources relating to your advice, for example, AASBs, Corporations Act, and relevant websites. Here are the two issues we are most concerned about: 1. The primary business activity of Neoen Ltd is developing accounting software packages. Neoen charges $2,000 as installation fees and a separate two-year technical support service for $1,000. Otherwise, it also offers a combined goods and services contract which includes both elements for $3,400. Payment does not become outstanding until after 1 month of the accounting package being installed. The accounting team is uncertain as to how revenue should be recognised in the books if the two products are sold separately and what if they are sold as a package. Your advice on this matter would be greatly appreciated. 2. On July 2020, one of Neoen Pty Ltd’s client engaged legal proceedings and commenced seeking damages from Neoen Pty Ltd due to loss of clients, possibly caused by a faulty accounting software package sold by the company. Neoen Pty Ltd disputes the liability, and its lawyers initially advised that it is probable that the company will not be found liable. The accounting team is not sure whether something should be disclosed in the account in the first place. What would happen then if, owing to developments in the case, it becomes probable that Neoen Pty Ltd is found liable, but the amount of damages to be awarded cannot be measured with sufficient reliability. Finally, what would happen if a reliable estimate could or could not be made of the damages to be awarded. Please respond