PFRS 15

Revenue from Contracts with Customers

-the contract has been approved by the parties

REVENUE RECOGNITION
OBJECTIVE SCOPE & EXCEPTIONS
FRAMEWORK -party’s rights in relation to the goods or services to be
transferred and the payment terms can be identified
Applies to
all
-the contract has commercial substance; and
To establish the contracts 1. Identify the contract with the customer
principles that except: -it is probable that the consideration to which the entity is
an entity shall entitled to in exchange for the goods or services will be
apply to report collected.
useful
information to
❖ Lease
users of -a good or service (or bundle of goods or services) that is
contracts (PAS
financial distinct
17) 2..Identify the performance obligations in
statements
❖ Insurance the contract -a series of distinct goods or services that are substantially the
about the
contracts same and that have the same pattern of transfer to the
nature, amount,
(PFRS 4) customer
timing, and
❖ Financial
uncertainty of
instruments
revenue and
and other how?
cash flows consider the variable considerations
contractual
arising from a 3. Determine the transaction price
rights and
contract with a
obligations
customer.
mentioned in
PFRS 9,10, transaction price is the amount to which an entity expects to
PAS 27, 28 be entitled in exchange for the transfer of goods and services.
❖ Non-
monetary 4. Allocate the transaction price to the performance how?
Based on relative standalone selling prices,
exchanges obligations in the contracts if not observable, estimate it.
between
entities within
the same Over time
5. Recognize revenue when (or as) the entity satisfies a control is passed
business
performance obligation At the point of time
 PFRS 15

Revenue from Contracts with Customers

CONTRACT COSTS PRESENTATION IN FS DISCLOSURES

Qualitative &
Costs to obtain a contract Cost to fulfill a contract Contract asset
depending Quantitative
recognized when the on the
entity’s right to relationship
✓ Sales recognized as an asset if: consideration is between
commissions
capitalized conditional on something the entity’s -its contracts with
✓ Legal fees presented
✓ costs relate other than the passage of performanc customers
✓ Bonuses to and amortized directly to a time e and the
employees -the significant
contract customer’s
Contract Receivable judgments, and
payment
✓ costs generate or changes in the
enhance recognized when the judgments, made
resources of the entity’s right to in applying the
entity that will be consideration is guidance to those
used in satisfying contracts
unconditional except for
performance the passage of time.
- any assets
obligations in the recognized from
future the costs to obtain
Contract liability
or fulfil a contract
with a customer.
✓ costs are expected presented
to be recovered where a customer has paid an amount
of consideration prior to the entity
performing by transferring the related
good or service to the customer