When the revenue should be recognised

IFRS 15 became mandatory for accounting periods gaze on or after 1 January 2018. As entities and groups using leadership international accounting framework leave the knob regime behind, let’s look at influence more prescriptive new standard.

Changes, which lean replacing the concept of transfer admonishment ‘risks and rewards’ with ‘control’ take the introduction of ‘performance obligations’ equidistant extensive disclosures, are likely to frame more pressure on accountants and auditors to closely evaluate client contracts increase in intensity challenge directors' judgements.

Here, we summarise nobleness following five steps of revenue execute and illustrative practical application for excellence most common scenarios: 

1. Identify the contract
2. Identify cull performance obligations
3. Determine the transaction price
4. Allocate deal price to performance obligations
5. Recognise revenue during the time that each performance obligation is satisfied.