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What is a good or service that is distinct?

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What is a good or service that is distinct? – 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. See a summary of IFRS 15 here. What is a good or service that is distinct? Determining a distinct good or service is part of identifying separate performance obligations. An important item to look at is whether a … Read more

IFRS 15 the new revenue model – The best read

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A closer look at IFRS 15 the new revenue model – IFRS 15 establishes principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. A closer look at IFRS 15 the new revenue model The revenue model applies to all contracts with customers except leases, insurance contracts, financial instruments, guarantees and certain non-monetary exchanges. The sale of non-monetary financial assets, such as property, plant and equipment, real estate or intangible assets will also be subject to some of the requirements of IFRS 15. A contract with a customer may be partially within the scope of IFRS … Read more

Licences of intellectual property

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Licences of intellectual property The determination of whether a licence is distinct may require judgement. In some software arrangements, a software licence will be distinct because it is the only promise in the contract. In other arrangements, the customer will be able to benefit from the licence on its own or with readily available resources and it will be separately identifiable from the other goods or services in the contract (i.e., the other goods or services are also distinct). An example of a distinct licence is a software package that can be used on its own without customisation or modification and future upgrades are not necessary for the customer to retain continued functionality of the software for a reasonable period … Read more

Arrangements partially in IFRS 15

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Arrangements partially in IFRS 15 is about that difficult situation of a mixed contract, parts are in IFRS 15 parts are outside IFRS 15. IFRS 15 provides accounting requirements for all revenue arising from contracts with customers. Arrangements partially in IFRS 15 They affect all entities that enter into contracts to provide goods or services to their customers, unless the contracts are in the scope of other IFRSs requirements, such as IFRS 16 the leasing standard. Arrangements partially in IFRS 15 The standard provides requirements for arrangements partially within the scope of IFRS 15 and partially within the scope of other standards, as follows: Reference: Partially in scope – IFRS 15 7 Document your decisions in your financial close file … Read more