IFRS 15 Mindmap

IFRS 15 : REVENUE
INCOME PERFORMANCE
increases in economic benefits during OBLIGATION
accounting period in the form of inflows or
enhancements of assets or decreases of Lorem ipsum dolor sit amet,
liabilities that result in increase in equity consectetur adipiscing elit.
Proin varius, eros nec efficitur
euismod, lectus turpis
REVENUE sollicitudin augue, non
ultricies enim nunc sit amet
INCOME ARISING IN augue.
CONTRACT
COURSE OF A ENTITY’S STAND-
An agreement between two ORDINARY ACTIVITIES ALONE PRICE
or more parties that create (NATURE OF THE
enforceable rights and Lorem ipsum dolor sit amet,
ENTITY’S BUSINESS) consectetur adipiscing elit.
obligations
Proin varius, eros nec efficitur
euismod, lectus turpis
sollicitudin augue, non
ultricies enim nunc sit amet
CUSTOMER
augue.
A party that has contracted with an
entity to obtain goods or services
that are an output of the entity’s
ordinary activities in exchange for
consideration
COMBINATION OF
1) WRITTEN, ORALLY, OR IN ACCORDANCE WITH
CONTRACT
OTHER CUSTOMARY BUSINESS PRACTICE TWO or more contract
2)EACH PARTY RIGHT CAN BE IDENTIFIED entered into the same
time/same customer or
3)PAYMENT TERM CAN BE IDENTIFIED
related parties, are
4)CONTRACT HAS COMERCIAL SUBSTANCE accounted as if they
were a single contract
5)IT IS PROBABLE THAT CONSIDERATION WILL
BE COLLECTED STEP 1 :
AT LEAST ONE CRITERIA MET
IDENTIFY THE
CONTRACT
CONTRACT
MODIFICATION COntract are negotiated as a
package with single commercial
objective
AS SEperate contact, if and only 2 COnsideration for each contract
criteria are fulfilled is interdependent on other
goods or services represent
CONTRACT SCOPE HAS INCREASED DUE TO ADDITIONAL
single performance obligation
GOODS AND SERVICES MODIFICATION, WHICH MUST BE
DISTINCT FROM ORIGINAL CONTRACT
CHANGES IN TRANSACTION PRICE - CONSIDERATION

FOR ADDITIONAL G/S MUST REFLECT STAND-ALONE
PRICE
STEP 2: Identifying the performance
obligation STEP 3: Identify transaction price
This step requires entity to identify the Transaction price:

distinct goods or services promised in Amount of consideration in exchange for
contract transferring promised goods/ service to
customer
Performance obligation is a promise to customer

When determining the transaction orice,
to transfer:-
entity shall consider effect of ALL
single good or service that is distinct - single following:
contract can have more than one
preformance obligation 1. Variable consideration. - 2 method in
series of distinct goods or service that are estimating (expected value, most likely
substantially the same and have same pattern amount)
of transfer to customer 2. Constraining estimates of variable
consideration
Good or service is distinct if both criteria 3. Existence of a significant financing
met : component in the contract (Delay in
customer can benefit from the g/s either on timing of payment from customer)
its own or together with other resources 4. Non cash consideration (@FV and if not
Entity’s promise to transfer the g/s to the reliably determinable, stand-alone SP of
customer is separately identifiable from other good/services)
promises in contract 5. Consideration paid to customer
(refund?)
STEP 4 : Allocate the transaction price to
each performance obligation
(iii) Residual approach -
after obsevable stand
slone SP of other PO have
If stand alone SP not been deducted
observable, it is
estimated
Approaches to use as
following
The starting point is

based on the stand-alone
selling price of each PO
(ii)Expected cost
plus margin
(i) Adjusted market

assessment
-price that customer willing
to pay
-should reflect vendor’s
cost +margin
VENDOR HAS A
RIGHT TO PAYMENT
CUSTOMER HAS A
LEGAL TITLE
AT A STEP 5: OVER
CUSTOMER HAS
POINT IN Recognise PERIOD OF
PHYSICAL POSSESSION
TIME TIME
revenue
SIGNIFICANT RISK &
REWARD OWNERSHIP
ASSET WITH NO CUSTOMER RECEIVES AND
ALTERNATIVE USE AND CONSUMES THE BENEFIT
ACCEPTANCE (BY
CUSTOMER) ENTITY HAS ENFORCEABLE AS THE ENTITY PERFORM
RIGHT TO PAYMENT FOR
PERFORMACNECOMPLETED
TO DATE
Contract
cost
cost of obtaining cost of fulfilling

a contract a contract
incurred regardless of recognised as asset if
whether contract was entity expect to recover
obtained recognised as those costs
expense cost that will not inccurred
unless those costs explicitly if contract had not been
chargeable to customer obtained
COST COST
CAPITALISED EXPENSED
cost relate directly to general and admin cost
contract cost of wasted material.
cost generate/enhance labour, other resources
resources of the entity cost relate to satisfied PO
costs expected to be cost which entity cannot
recovered distinguish

IFRS 15 Mindmap

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IFRS 15 Mindmap

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IFRS 15 : REVENUE

CHANGES IN TRANSACTION PRICE - CONSIDERATION

This step requires entity to identify the Transaction price:

Performance obligation is a promise to customer

The starting point is

(i) Adjusted market

cost of obtaining cost of fulfilling

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