--- oa_review_kit: v1 guide_slug: ifrs15-revenue guide_version: ifrs15-revenue@2026-05-29T07:05:14.796Z archetype: other --- # Review kit: Ifrs15 Revenue Thank you for reviewing this Guide. This kit is one file with three parts: how to use it, an interview prompt for your AI, and the Guide itself. ## How to use this kit (3 steps, about 15 minutes) 1. Open the AI you already use (ChatGPT, Claude, Gemini, anything that reads markdown) and paste in everything from "INTERVIEW PROMPT" below, including the Guide at the end. 2. Your AI interviews you like a colleague, one question at a time. Just talk: war stories, walk-throughs, the mistakes you catch. No writing required. 3. Your AI writes your answers up as a single markdown file. Hand it back at openaccountants.com/skills/ifrs15-revenue/handback (also linked from the Guide page: "Hand back your file"). What you added is published under your name and credential. If your AI cannot produce the exact output format, hand back whatever you have: a revised Guide file, a worksheet, or plain notes. We take those too, and a person reviews them by hand. The format below is the one we can apply straight away. --- # INTERVIEW PROMPT (paste from here down into your AI) You are interviewing a practising accountant about how they actually do the work covered by the attached Guide ("Ifrs15 Revenue", slug `ifrs15-revenue`). Interview them like a colleague doing a handover. Do not lecture. Ask ONE question at a time and wait for the answer. Chase war stories and specifics: what kind of client, which portal step, how big the penalty was. The rates, thresholds, and citations are our job; we refresh those from primary sources. Capture ONLY what is NOT derivable from law: - order of operations, and what a wrong order corrupts - what to ask a client before computing anything - what to assume when a fact is unknown, and how it gets flagged - the most-missed traps, with penalty size and who falls in - how the portal or filing channel actually behaves - what has to reconcile before anyone signs - when to refuse the work and hand it to a human specialist If the accountant corrects a rate, threshold, or deadline in the Guide along the way, record it in the FACT CORRECTIONS table, but do not steer the interview toward numbers. ## Questions to work through Ask these in order, one at a time. Skip any the accountant has already covered; follow up where a story has specifics worth pinning down. Each question is tagged with the method slot(s) it feeds. 1. [sequence] Walk me through the last one of these you did for a real client, start to finish. What did you open first, and why that order? 2. [intake_questions] A new client sits down for this work. What are your first five questions before you touch a number? 3. [evidence] Which documents do you insist on seeing, and which do you take the client's word for? 4. [trap] When you review this work drafted by someone else, what mistake do you catch most often? 5. [conservative_default] When a key fact is unknowable at draft time, what do you assume, and how do you flag it? 6. [judgment_rule] When the law allows two routes, how do you actually pick, and what do you write down about the choice? 7. [cross_check] Before you sign, what has to reconcile with what, and how close is close enough? 8. [filing_mechanics] Walk me through the actual submission: the portal steps, the order things must happen in, what locks, what you can't undo. 9. [scope_gate] Which clients do you refuse or refer to a specialist for this work? What makes you stop? 10. [unsettled_law] Anything here you deliberately won't finalise right now because the rules are moving? 11. [handback_protocol] What exactly do you hand over at the end? What's in your working paper? ## Method slots (for tagging the write-up) - `scope_gate` (Scope gate and refusals): when to stop and send the client to a human - `sequence` (Order of operations): what order to do things in, and what a wrong order corrupts - `intake_questions` (Client intake questions): what to ask a client before computing - `evidence` (Documents and evidence): which documents to insist on, and what is draft-grade vs file-grade - `judgment_rule` (Judgment rules): how a practitioner actually picks when the law allows two routes - `conservative_default` (Conservative defaults): what to assume when a fact is unknowable at draft time - `trap` (Traps and most-missed items): the mistakes everyone makes, what they cost, and who falls in - `filing_mechanics` (Portal and filing mechanics): how submission actually works: channel, order, what locks - `cross_check` (Cross-checks before signing): what has to reconcile with what before delivery, and how close is close enough - `pattern_library` (Pattern library): how messy real-world data (bank lines, payout platforms) maps to tax categories - `edge_case` (Edge-case playbook): the client situations that change the method, not just the numbers - `unsettled_law` (Unsettled-law flags): what not to finalise right now, and why - `handback_protocol` (Hand-back protocol): what the finished working paper contains and who reviews it ## Output format: oa-handback v1 When the interview is done, write the answers up as ONE markdown file in exactly this shape. Fill in the reviewer's real name, credential, and email (ask for them at the end if they have not come up). Every method block gets a `### [method:]` heading where `` is one of the 13 slot ids above. Keep `guide_slug` and `guide_version` exactly as given. Omit any section the interview produced nothing for, but keep the headings that remain exactly as shown. The `fact_key` column may be left blank when unknown. ```markdown --- oa_handback: v1 guide_slug: ifrs15-revenue guide_version: ifrs15-revenue@2026-05-29T07:05:14.796Z reviewer_name: reviewer_credential: # free text: CPA, EA, ACCA, Steuerberater... reviewer_email: verdict: --- ## METHOD ### [method:filing_mechanics] ### [method:intake_questions] - - ... ## FACT CORRECTIONS | fact_key | current | correct | source | |---|---|---|---| | | | | | ## FLAGS - [unsettled] - [refer] ## NOTES ``` If for any reason you cannot produce this exact format, output the accountant's corrections and methods as clear plain notes instead. The hand-back page accepts plain notes and revised Guide files too; this format is an optimization, never a gate. --- # THE GUIDE UNDER REVIEW --- name: ifrs15-revenue description: IFRS revenue recognition under IFRS 15 (Revenue from Contracts with Customers) and the related contract-cost guidance within IFRS 15. Covers the five-step model — identify the contract, identify performance obligations, determine the transaction price, allocate it, and recognise revenue as or when obligations are satisfied — plus variable consideration and the constraint, significant financing components, principal-versus-agent, licences, contract modifications, contract assets and liabilities, and the costs of obtaining and fulfilling a contract. Produces recognition conclusions, journal entries, and a reviewer brief. Issued as the IFRS edition of the revenue topic; see us-gaap-asc606-revenue for the US GAAP edition. MUST load alongside financial-reporting-workflow-base. jurisdiction: GLOBAL domain: financial-reporting tax_year: 2025 --- # ifrs15-revenue ## IFRS Revenue — IFRS 15 v0.1 ## What this file is **This is a content skill that loads on top of `financial-reporting-workflow-base`.** It supplies the recognition, measurement, presentation, and disclosure rules for revenue from contracts with customers under IFRS. The base supplies the two-layer output contract, the journal-entry format, and the self-checks. - **Standard currency** — IFRS 15 as effective for annual periods beginning on or after 1 January 2018, including *Clarifications to IFRS 15* (April 2016). No subsequent amendment has displaced the five-step core. _(IFRS 15)_ - **Scope** — IFRS 15 applies to contracts with customers except: leases (IFRS 16), insurance contracts (IFRS 17), financial instruments and other contractual rights/obligations in IFRS 9 / IFRS 10 / IFRS 11 / IAS 27 / IAS 28, and certain non-monetary exchanges between entities in the same line of business to facilitate sales to customers. _(IFRS 15.5)_ ## Section 1 — Scope statement This skill covers: - The five-step model of IFRS 15. - Variable consideration and the constraint; significant financing components; non-cash consideration; consideration payable to a customer. - Principal vs. agent, licences of IP, warranties, customer options (material rights), bill-and-hold, repurchase agreements, consignment. - Contract modifications. - Presentation of contract assets, contract liabilities, and refund liabilities. - Incremental costs of obtaining a contract and costs to fulfil (`IFRS 15.91`–`104`). This skill does NOT cover: lease income (`IFRS 16`), interest/dividend income (`IFRS 9`/`IAS 18`-legacy superseded), insurance (`IFRS 17`). It defers the US GAAP treatment to `us-gaap-asc606-revenue`. ## Section 2 — Reference layer (Layer A): the five-step model ### Step 1 — Identify the contract — `IFRS 15.9`–`16` - **Contract identification criteria** — A contract with a customer is in scope when **all five** criteria are met: 1. The parties have **approved** the contract and are committed to perform. 2. Each party's **rights** are identifiable. 3. **Payment terms** are identifiable. 4. The contract has **commercial substance**. 5. It is **probable** the entity will collect the consideration it is entitled to. Under IFRS, **"probable" = more likely than not** — a **lower** threshold than US GAAP's "likely." _(IFRS 15.9)_ - **Criteria not met treatment** — If criteria are not met, consideration received is recognised as a **liability** until the criteria are met or the `15.15` release events occur. _(IFRS 15.15)_ - **Combine contracts** — Combine contracts with the same customer (or related parties) entered into at/near the same time when negotiated as a package, consideration is interdependent, or the goods/services form a single performance obligation. _(IFRS 15.17)_ > **⚑ AUDIT FLASH POINT — collectibility threshold differs from US GAAP.** The IFRS bar to *have a contract* is lower. A US-GAAP-trained reviewer may wrongly defer revenue. Document the "more likely than not" assessment. ### Step 2 — Identify the performance obligations — `IFRS 15.22`–`30` - **Performance obligation** — A performance obligation is a promise to transfer a **distinct** good/service or a **series** of distinct goods/services that are substantially the same and have the same pattern of transfer. _(IFRS 15.22)_ - **Distinct criteria** — Distinct requires **both**: **Capable of being distinct** — the customer can benefit from it on its own or with readily available resources; and **Distinct within the context of the contract** — separately identifiable; the entity is not providing a significant integration service, the good does not significantly customise/modify another, and it is not highly interdependent/interrelated. _(IFRS 15.27; IFRS 15.29)_ ### Step 3 — Determine the transaction price — `IFRS 15.46`–`72` - **Transaction price** — Transaction price = consideration the entity expects to be **entitled to**, excluding amounts collected on behalf of third parties. _(IFRS 15.46)_ - **Variable consideration** — Estimate using **expected value** or **most likely amount**. _(IFRS 15.50–54)_ - **The constraint** — Include only to the extent **highly probable** that a significant reversal will not occur. *(IFRS uses "highly probable"; US GAAP uses "probable" — wording differs, intended threshold is the same.)* _(IFRS 15.56–58)_ - **Significant financing component** — Adjust for time value of money where significant. Practical expedient: ignore if ≤ 1 year between transfer and payment. _(IFRS 15.60–65; IFRS 15.63)_ - **Non-cash consideration** — Measure at **fair value**; if fair value cannot be reasonably estimated, measure by reference to the standalone selling price. _(IFRS 15.66–69)_ - **Consideration payable to a customer** — Reduction of transaction price unless for a distinct good/service. _(IFRS 15.70–72)_ > **⚑ AUDIT FLASH POINT — non-cash consideration measurement date.** IFRS measures non-cash consideration at fair value (with a fallback to SSP) and the measurement-date approach can differ from ASC 606's "contract inception" rule. Flag for dual-reporters. ### Step 4 — Allocate the transaction price — `IFRS 15.73`–`90` - **Allocation by SSP** — Allocate to each PO by **standalone selling price**; estimate SSP where not observable (adjusted market assessment, expected cost plus margin, or residual approach with the `15.79` restrictions). Allocate discounts (`15.81`–`83`) and variable consideration (`15.84`–`86`) to specific POs where the criteria are met. _(IFRS 15.76; IFRS 15.79; IFRS 15.81–83; IFRS 15.84–86)_ ### Step 5 — Recognise revenue when/as a PO is satisfied — `IFRS 15.31`–`45` - **Recognition trigger** — Recognise revenue when the entity transfers **control** of the good/service. _(IFRS 15.31)_ - **Over time criteria** — **Over time** if **any one** of three criteria is met: 1. The customer **simultaneously receives and consumes** benefits as the entity performs; or 2. Performance **creates or enhances an asset the customer controls**; or 3. Performance does **not create an asset with alternative use** and the entity has an **enforceable right to payment** for performance to date. _(IFRS 15.35)_ - **Measuring progress** — If over time, **measure progress** by output or input method; if progress cannot be reasonably measured but costs are recoverable, recognise revenue only to the extent of costs. _(IFRS 15.39–45; IFRS 15.45)_ - **Point in time indicators** — **Point in time** otherwise — recognise when control transfers, using indicators in `15.38` (present right to payment, legal title, physical possession, risks and rewards, acceptance). _(IFRS 15.38)_ ## Section 3 — Reference layer: high-frequency special topics - **Principal vs. agent** — Principal **controls** the good/service before transfer → **gross**; agent → **net** (fee/commission). Same indicators as US GAAP. _(IFRS 15.B34–B38)_ - **Licences of IP** — **Right to access** (IP changes over the period) → **over time**; **right to use** (IP as it exists when granted) → **point in time**. Sales/usage-based **royalty exception**: recognise at the later of the subsequent sale/usage or satisfaction of the PO. _(IFRS 15.B52–B63; IFRS 15.B63)_ - **Warranties** — Assurance-type → provision under `IAS 37`, not a PO; service-type → separate PO. _(IFRS 15.B28–B33)_ - **Customer options / material rights** — A material right is a separate PO. _(IFRS 15.B39–B43)_ - **Contract modifications** — Separate contract if distinct goods at SSP; otherwise prospective (if remaining goods distinct) or cumulative catch-up (if not). _(IFRS 15.18–21)_ ## Section 4 — Reference layer: contract costs — `IFRS 15.91`–`104` - **Incremental costs of obtaining a contract** — Recognised as an **asset** if expected to be recovered. Practical expedient: expense if amortisation period ≤ 1 year. _(IFRS 15.91; IFRS 15.94)_ - **Costs to fulfil a contract** — Costs to fulfil a contract (not in another standard) are capitalised if they relate directly to a contract, generate/enhance resources, and are expected to be recovered. _(IFRS 15.95)_ - **Amortisation and impairment** — **Amortise** consistent with transfer of goods/services; test for impairment. _(IFRS 15.99–104)_ ## Section 5 — Presentation — `IFRS 15.105`–`109` - **Contract liability** — Consideration received/due before transfer of goods/services. _(IFRS 15.105–109)_ - **Contract asset** — Right to consideration for goods/services transferred, conditional on something other than the passage of time. Once unconditional → **receivable** (in scope of `IFRS 9` for impairment). _(IFRS 15.105–109)_ - **Refund liability** — Refund liability plus an **asset for the right to recover** returned goods. _(IFRS 15.105–109)_ ## Section 6 — Executable layer (Layer B): the procedure Identical procedure to the US GAAP edition (base §1, two layers), citing IFRS 15 paragraphs: 0. **Confirm a contract exists** — Confirm a contract exists (`15.9`); if collectibility (more-likely-than-not) fails, book a liability and stop. 0. **List promises → POs** — List promises → POs (`15.22`–`30`); document distinct analysis; flag series, material rights, warranties. 0. **Build the transaction price** — Build the transaction price (`15.46`–`72`): fixed + constrained variable; significant financing component; non-cash at fair value; net consideration payable. 0. **Determine SSP and allocate** — Determine SSP and allocate (`15.73`–`90`); show the table. 0. **Timing per PO** — Timing per PO (`15.31`–`45`): over time (criterion + progress measure) or point in time (control indicators). 0. **Principal/agent for third-party promises** — Principal/agent for third-party promises (`B34`–`B38`) → gross/net. 0. **Recognise revenue; book journal entries** — Recognise revenue; book **journal entries** (base §3) day 1 + subsequent. 0. **Capitalise/amortise contract costs** — Capitalise/amortise contract costs (`15.91`–`104`). 0. **Classify balances** — Classify balances (`15.105`–`109`). 0. **Disclosure checklist + reviewer brief** — Disclosure checklist (§8) + **reviewer brief** with every flash point. ### Worked example (illustrative) Same SaaS facts as the US GAAP edition ($24,000 subscription + $6,000 non-distinct setup, paid upfront, 24-month delivery). Single combined PO, over time under `15.35(a)`, straight-line. ``` Day 1 — driving rule: IFRS 15.106 (contract liability) Dr Cash 30,000 Cr Contract liability 30,000 (memo: single combined PO; no revenue at inception) Each month (×24) — driving rule: IFRS 15.35(a) Dr Contract liability 1,250 Cr Revenue 1,250 (memo: 30,000 / 24; debits = credits ✓) Day 1 — incremental cost to obtain — driving rule: IFRS 15.91 Dr Contract cost asset 3,000 Cr Cash 3,000 Each month (×24) — amortise — driving rule: IFRS 15.99 Dr Amortisation expense 125 Cr Contract cost asset 125 ``` > **⚑ AUDIT FLASH POINT — same combine/separate judgement as US GAAP.** The distinct conclusion drives timing identically; evidence the integration analysis. ## Section 7 — Divergence from US GAAP (ASC 606) **IFRS 15 vs US GAAP (ASC 606) divergence table** _(IFRS 15 / ASC 606 comparison)_ | Area | IFRS 15 | US GAAP (ASC 606) | | --- | --- | --- | | Collectibility threshold (Step 1) | "Probable" = **more likely than not** (lower bar) | "Probable" = **likely** (higher bar) | | Constraint wording | "Highly probable" | "Probable" (same intended threshold) | | Shipping & handling | **No** policy election — assess as promised service | Policy election to treat as fulfillment activity | | Immaterial promised goods/services | No explicit relief; general materiality | Explicit relief to disregard (`606-10-25-16A`) | | Non-cash consideration | Fair value, fallback to SSP; measurement-date guidance differs | Fair value at contract inception | | Licensing renewals & sales-based royalties | Minor application differences | Minor application differences | | Interim disclosures | IAS 34 | US public-entity interim regime | | Reversal of impairment of contract cost assets | **Permitted** (consistent with IFRS) | **Prohibited** (US GAAP generally bars reversal) | Run `us-gaap-asc606-revenue` in parallel for dual-reporters and present both answers (base §2). ## Section 8 — Disclosure checklist — `IFRS 15.110`–`129` - **Disclosure checklist** — - [ ] Disaggregation of revenue (`114`–`115`) - [ ] Contract balances and movements; revenue recognised from opening contract liabilities (`116`–`118`) - [ ] Performance obligations: nature, timing, significant payment terms (`119`) - [ ] Transaction price allocated to remaining POs (backlog) and timing (`120`–`122`) - [ ] Significant judgements: timing of satisfaction; determining/allocating transaction price (`123`–`126`) - [ ] Contract cost assets: closing balances and amortisation (`127`–`128`) - [ ] Practical expedients used (`129`) _(IFRS 15.110–129)_ ## Section 9 — Topic self-checks (in addition to base §7) - [ ] All five steps applied in order; each conclusion cites its IFRS 15 paragraph - [ ] Collectibility assessed on the **more-likely-than-not** basis (not US GAAP "likely") - [ ] Distinct analysis documented per PO - [ ] Variable consideration estimated and constrained ("highly probable"); method stated - [ ] Significant financing component assessed (or expedient) for timing > 1 yr - [ ] SSP allocation table shown - [ ] Over-time vs. point-in-time tied to a `15.35` criterion or control indicator - [ ] Principal/agent resolved → gross/net - [ ] Contract costs capitalised/amortised per `15.91`–`104`; impairment (and any reversal) considered - [ ] Balances classified: contract asset vs. receivable vs. contract liability vs. refund liability - [ ] Divergence from ASC 606 checked for dual-reporters ## Section 10 — Disclaimer Provides computational and interpretive guidance on IFRS 15 only. Not an audit and not assurance. Revenue recognition turns heavily on entity-specific facts and significant judgement. Have outputs reviewed and signed by a qualified accountant before they are reflected in financial statements relied upon by third parties.