IFRS 15 - Revenue from contracts with customers

DAIF Chapter 4

Revenue - recognized

Transfer of promise - goods and services to customers

Expects to entitle consideration

Customer

A party

has contracted

to obtain goods or services

Output of entity

Income

Increases in economic benefits

Increase of assets, decrease of liabilities - increase in equity

Revenue

Income arising

From entity’s ordinary activities

Step 1

STEP 1 - CONTRACT

Identify contract with customer

Contract - approved by both parties

Each parties’ rights and payment terms identified

Contract - Commercial substance စီးပွားရေးအရတည်ရှိလာတဲ့အရာတစ်ခု

Consideration - collected - probable

Step 2

STEP 2 - OBLIGATION

Identify the performance obligations in the contract

Contract - more than one promise (e.g. call time and data)

- Assess - goods and services - distinct

- each promise transferred

Step 3

STEP 3 - CONSIDERATION

Determine the transaction price

Consideration

Exclude VAT

May include

Variable consideration

Discount, bonus

Step 4

STEP 4 - ALLOCATION

Allocate the transaction price to the performance obligations in the contract

Transaction price
Allocated
Each performance
Amount of consideration

Separate consideration e.g. handset, call time + data

Step 5

STEP 5 - SATISFIED

Recognize revenue when performance obligation is satisfied

Satisfied
Performance obligations
Transferring goods and services

Recognized in FS

Completion of performance obligations

Output method - value of work satisfied

Input method - costs incurred to date