IFRS 15 Revenue – Real estate | Annualreporting.info

Satisfaction of construction performance obligations

This narrative considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that:

  • Own, operate and sell real estateRecognise revenue in progress or at completion
  • Provide property management services
  • Construct and sell residential property

IFRS 15 introduced a five step process for recognising revenue, as follows:

  1. Identify the contract with the customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price for the contract
  4. Allocate the transaction price to each specific performance obligation
  5. Recognise the revenue when the entity satisfies each performance obligation

An entity recognises revenue only when it satisfies a performance obligation by transferring control of a promised good or service Read more

Allocate the transaction price to the performance obligations

This narrative considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that: Allocate the transaction price to the performance obligation

  • Own, operate and sell real estate
  • Provide property management services
  • Construct and sell residential property

IFRS 15 introduced a five step process for recognising revenue, as follows:

  1. Identify the contract with the customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price for the contract
  4. Allocate the transaction price to each specific performance obligation
  5. Recognise the revenue when the entity satisfies each performance obligation

Once the performance obligations have been identified and the transaction price has … Read more

Determine the transaction price – property construction

This narrative considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that:

  • Own, operate and sell real estate
  • Provide property management services
  • Construct and sell residential property

IFRS 15 introduced a five step process for recognising revenue, as follows:

  1. Identify the contract with the customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price for the contract
  4. Allocate the transaction price to each specific performance obligation
  5. Recognise the revenue when the entity satisfies each performance obligation

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring … Read more

Performance obligations in a property management contract

This narrative considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that:Performance obligations in a property management contract

  • Own, operate and sell real estate
  • Provide property management services
  • Construct and sell residential property

IFRS 15 introduced a five step process for recognising revenue, as follows:

  1. Identify the contract with the customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price for the contract
  4. Allocate the transaction price to each specific performance obligation
  5. Recognise the revenue when the entity satisfies each performance obligation

Once an entity has identified the contract with a customer, it evaluates the contractual terms and its customary business … Read more

Construction of a residential home

Home-builder B enters into a contract to build a new home for a customer on land owned by Home-builder B. Ownership of the home and land are transferred to the customer when construction is completed. The home-builder is responsible for the overall management of the project and identifies various goods and services to be provided, including design work, procurement of materials, site preparation and foundation pouring, framing and plastering, mechanical and electrical work, installation of fixtures (e.g., windows, doors, cabinetry) and finishing work.

What is going on?

Home-builder B first evaluates whether the customer can benefit from each of the various goods and services, either on their own or together with other readily available resources. Home-builder B determines that these … Read more

Real estate revenue

This narrative considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that:

  • Own, operate and sell real estateStep 1 Identify the contract with the customer
  • Provide property management services
  • Construct and sell residential property

IFRS 15 introduced a five step process for recognising revenue, as follows:

  1. Identify the contract with the customer
  2. Identify the performance obligations in the contract
  3. Determine the transaction price for the contract
  4. Allocate the transaction price to each specific performance obligation
  5. Recognise the revenue when the entity satisfies each performance obligation


In most real estate arrangements, a signed, written contract specifies the asset to be transferred or services to be provided … Read more