IFRS 15 Objective and scope

Objective

1 The objective of this Standard is to establish the principles that an entity shall apply to report useful information to cash flows arising from a contract with a customer.

Meeting the objective

2 To meet the objective in paragraph 1, the core principle of this Standard is that an entity shall recognise revenue to depict … Continue reading

IFRS 15 Identifying the contract

Part of the main section Recognition

9 An entity shall account for a contract with a customer that is within the scope of this Standard only when all of the following criteria are met:

  1. the parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations;
  2. the entity can identify each party’s rights regarding the goods or services to be transferred;
  3. the entity can
Continue reading

IFRS 15 Combination of contracts

Part of the main section Recognition

17 An entity shall combine two or more contracts entered into at or near the same time with the same customer (or related parties of the customer) and account for the contracts as a single contract if one or more of the following criteria are met:

  1. the contracts are negotiated as a package with a single commercial objective;
  2. the amount of consideration to be paid in one contract depends on the price or performance
Continue reading

IFRS 15 Contract modifications

Part of the main section Recognition

18 A contract modification is a change in the scope or price (or both) of a contract that is approved by the parties to the contract. In some industries and jurisdictions, a contract modification may be described as a change order, a variation or an amendment. A contract modification exists when the parties to a contract approve a modification that either creates new or changes existing enforceable rights and obligations of the parties to … Continue reading

IFRS 15 Satisfaction of performance obligations

Part of the main section Recognition

31 An entity shall recognise revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (ie an asset) to a customer. An asset is transferred when (or as) the customer obtains

32 For each performance obligation identified in accordance with paragraphs 22–30, an entity shall determine at contract inception whether it satisfies the performance obligation over time (in accordance … Continue reading

IFRS 15 Measurement

46 When (or as) a performance obligation is satisfied, an entity shall recognise as revenue the amount of the transaction price (which excludes estimates of variable consideration that are constrained in accordance with paragraphs 56–58) that is allocated to that performance obligation.

Click on the section of your interest:

Determining the transaction price

Allocating the transaction price to performance obligationsContinue reading

IFRS 15 Determining the transaction price

Part of the main section Measurement

47 An entity shall consider the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include … Continue reading

IFRS 15 Allocating the transaction price to performance obligations

Part of the main section Measurement

73 The objective when allocating the transaction price is for an entity to allocate the transaction price to each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer.

74 To meet the allocation objective, an entity shall allocate the transaction price to each performance obligation identified … Continue reading

IFRS 15 Changes in the transaction price

Part of the main section Measurement

87 After contract inception, the transaction price can change for various reasons, including the resolution of uncertain events or other changes in circumstances that change the amount of consideration to which an entity expects to be entitled in exchange for the promised goods or services.

88 An entity shall allocate to the performance obligations in the contract any subsequent changes in the transaction price on the same basis as at contract inception. Consequently, an … Continue reading