IFRS 15 Revenue Disclosures Examples

IFRS 15 Revenue Disclosures Examples

IFRS 15 Revenue Disclosures Examples provides the context of disclosure requirements in IFRS 15 Revenue from contracts with customers and a practical example disclosure note in the financial statements. However, as this publication is a reference tool, no disclosures have been removed based on materiality. Instead, illustrative disclosures for as many common scenarios as possible have been included.

Please note that the amounts disclosed in this publication are purely for illustrative purposes and may not be consistent throughout the example disclosure related party transactions.

Users of the financial statements should be given sufficient information to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. To achieve this, entities must provide qualitative and quantitative information about their contracts with customers, significant judgements made in applying IFRS 15 and any assets recognised from the costs to obtain or fulfil a contract with customers. [IFRS 15.110]

Disaggregation of revenue

[IFRS 15.114, IFRS 15.B87-B89]

Entities must disaggregate revenue from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. It will depend on the specific circumstances of each entity as to how much detail is disclosed. The Reporting entity Plc has determined that a disaggregation of revenue using existing segments and the timing of the transfer of goods or services (at a point in time vs over time) is adequate for its circumstances. However, this is a judgement and will not necessarily be appropriate for other entities.

Other categories that could be used as basis for disaggregation include:IFRS 15 Revenue Disclosures Examples

  1. type of good or service (eg major product lines)
  2. geographical regions
  3. market or type of customer
  4. type of contract (eg fixed price vs time-and-materials contracts)
  5. contract duration (short-term vs long-term contracts), or
  6. sales channels (directly to customers vs wholesale).

When selecting categories for the disaggregation of revenue entities should also consider how their revenue is presented for other purposes, eg in earnings releases, annual reports or investor presentations and what information is regularly reviewed by the chief operating decision makers. [IFRS 15.B88]

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Stand-alone selling price

The best evidence of standalone selling price is the price that the entity charges for the good or service in a separate transaction with a customer. However, in many cases goods or services are sold exclusively as a package with other goods or services rather than on an individual basis (e.g. nonrenewable customer support).

1 and best accounting revenue in a transfer of land

Here the questions raised is how to account for revenue in a transfer of land. Or to put it more formally how to account for revenue recognition in a real estate contract that includes the transfer of land (as per IFRS 15 Revenue from Contracts with Customers) as per the same 2018 IFRS Interpretations Committee Agenda Decision.

The case

An entity has obtained a piece of land to construct a building on. How should the entity account for the sale of the land and the building to be constructed on the land. revenue in a transfer of land

The contract includes the following features: revenue in a transfer of land

  • The entity and the customer enter
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Arrangements partially in IFRS 15

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:


Arrangements partially in IFRS 15

Reference:

Partially in scope – IFRS 15 7

Document your decisions in your financial close file

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Performance obligation

A performance obligation is a promise in a contract to transfer to the customer either 1 distinct goods/services or 2 a series of distinct goods/services

Allocate the transaction price to POs – E&C 1 Best Complete Read

Allocate the transaction price to POs – 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. Allocate the transaction price to POs


Once the performance obligations are identified and the transaction price has been determined, IFRS 15 requires (with some exceptions, as discussed below) an entity to allocate the transaction price to the performance obligations in proportion to their stand-alone selling prices (i.e., on a relative stand-alone selling price basis). Allocate the transaction price to POs

To allocate the transaction price on a relative stand-alone selling price basis, an entity must first determine the stand-alone selling price (i.e., the … Read more

Identify the contract with the customer – Engineering & Construction industry

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 … Read more

Identify Telecom performance obligations

Identify Telecom performance obligations – This is an example in a small series for illustrating the concepts in What is a good or service that is distinct?

Example one:

A telecoms company enters into a contract for the sale of a mobile device and connection to its mobile network. The contract, which lasts for two years, gives the customer:

  • X minutes of calls per month;
  • Y gigabytes of data per month; and obligations
  • Z texts per month.

The telecoms company frequently sells mobile devices without connecting them to the network. Although different combinations of minute, data and texts are available, it is not possible to buy only minutes, only data or only texts. Identify Telecom industry performance obligations

Identify Telecom performance obligations

The telecoms … Read more