An entity’s customary business practices

Licensing provides rights to a customer

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Licensing establishes a customer’s rights to the intellectual property of an entity. Licenses of intellectual property may include, but are not limited to, licenses of any of the following: Software (other than software subject to a hosting arrangement) and technology Motion pictures, music, and other forms of media and entertainment Franchises Licensing Patents, trademarks, and copyrights. Licensing In addition to a promise to grant a license (or licenses) to a customer, an entity may also promise to transfer other goods or services to the customer. Those promises may be explicitly stated in the contract or implied by an entity’s customary business practices, published policies, or specific statements. As with other types of contracts, when a contract with a customer includes … Read more

Refund liabilities

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Refund liabilities – An entity may receive consideration that it will need to refund to the customer in the future because the refunds of some kind may be made.

Distinct goods or services

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Distinct goods or services is a cornerstone of IFRS 15 Revenue from contracts with customers. Distinct means the customer can benefit directly from the service

Revenue from Contracts with Customers short version

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Revenue from Contracts with Customers short version – IFRS 15 Revenue from Contracts with Customers (contents page is here) introduced a single and comprehensive framework which sets out how much revenue is to be recognised, and when. The core principle is that a vendor should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services. Revenue from Contracts with Customers short version Revenue is now recognised by a vendor when control over the goods or services is transferred to the customer. In contrast, IAS 18 Revenue based revenue recognition around an analysis of the transfer … Read more

Identify the contract with the customer – Engineering & Construction industry

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Identify the contract with the customer – This part relates to a complete explanation of IFRS 15 Revenue from contracts with customers in respect of Engineering & Construction contracts, see Revenue from Engineering & Construction contracts. Identify the contract with the customer The model in IFRS 15 applies to each contract with a customer. Contracts may be written, oral or implied by an entity’s customary business practices, but must be legally enforceable and meet specified attributes. To apply the five-step model in IFRS 15, an entity must first identify the contract, or contracts, to provide goods or services to customers. Attributes of a contract Identify the contract with the customer To help entities determine whether (and when) their arrangements with … Read more