consideration is also present i an entity’s right to consideration Is contingent on the occurrence of @ future event. (IFRS 15:51) ‘The standard deals with the uncertainty relating to varlable consideration by limiting the amount of variable consideration that can be recognised. Specifically, variable consideration is only Included in the transaction price if, and to the extent that, its highly probable that its Inclusion will not result in a significant revenue reversal in the future when the uncertainty has been subsequently resolved. [IFRS 15:56) However, adlferent, more restrictive approach is applied in respect of sales or usage-based royalty revenue arising from licences of intellectual property. Such revenue Is recognised only when the underlying sales or usage occur. IFRS 15:863] ‘Step 4: Allocate the transaction price to the performance obligations inthe contracts ‘Where a contract has multiple performance obligations, an entity wil allocate the transaction price to the performance obligations in the contract by reference to thelr relative standalone selling prices. LIFRS 15:74] Ifa standalone selling price Is not direct observable, the entity will need to estimate it, IFRS 25 suggests various methods that might be used, including: [IFRS 15:73] Adjusted market assessment approach » Expected cost plus a margin approach > Residual approach (only permissible in limited circumstances) ‘Any overall discount compared to the aggregate of standalone selling prices is allocated between Performance obligations on a relative standalone selling price basis. n certain circumstances, it may be appropriate to allocate such a discount to some but not all ofthe performance obligations. [IFRS 15:81) ‘Where consideration is paid in advance or in arrears, the entity will need to consider whether the ‘contract includes a significant financing arrangement and, ifso, adjust for the time value of mone) [UFRS 15:60] A practical expedient is avallable where the interval between transfer of the promised 'g00dS or services and payment by the customer is expected to be less than 12 months. (IFRS 15:63] ‘Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation Revenue is recognised as control Is passed, elther over time or at a point in time. (IFRS 15:32) Control of an asset is defined as the ability to direct the use of and obtain substantially all ofthe remaining benefits from the asset. This includes the ability to prevent others from directing the use of ‘and obtaining the benefits from the asset. The benefit related to the asset are the potential cash flows that may be obtained directly or indirectly. ‘These include, but are not limited to: (IFRS 15:31-33] using the asset to produce goods or provide services; Using the asset to enhance the value of other assets; Using the asset to settle lablities or to reduce expenses; selling or exchanging the asset; pledging the asset to secure aloan; and holding the asset vyvvvy ‘An enty recognises revenue overt fone ofthe feliowing crt met: [IFRS 28:85] the customer simultaneously receives and consumes all ofthe benefits provided by the entity as the entity performs; > the entity's performance creates or enhances an asset that the customer controls as the asset is. created; or > the entity's performance does not create an asset with an alternative use to the entity and the: entity has an enforceable right to payment for performance completed to date.