Our company has recently entered into an agreement to sell equipment to Alpine Ltd for $180,000 on 12 December 2017. Beachlife Ltd will deliver the equipment on 22 December 2017, with payment due on 31 December 2017. The agreement states that, from the date of delivery, Beachlife Ltd must provide maintenance for this equipment for the first 12 months. Alpine Ltd is entitled to a refund of 15% of the amount paid if Beachlife Ltd does not satisfactorily maintain the equipment for the year as required. Beachlife Ltd estimates the fair value of maintaining the equipment throughout the year to be $15,000. The board cannot agree on the appropriate accounting treatment for this sale agreement. Could you please provide advice on the correct presentation of the revenue and related costs?
Based on AASB, Corporation Act.