Revenue
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
Identify the contract Identify the performance Determine the Allocate the transaction Recognise the revenue as/when
with the customer obligations in the contract transaction price price to the performance performance obligation is
obligation satisfied
C PO TP A R
Revenue Gains
Generated in course of ordinary activities Generated through abnormal transactions (disposals) – OCI / OI
Core Principle
Transfer of goods for an amount equal to the expected consideration entitled to
Step 1:
Customer is person contracted to obtain output of entity in exchange for consideration
Criteria to identify a contract
, Approved and parties committed to obligations
Rights identified
Pmt terms identified
Comm substance
Collection of consideration probable
Once the criteria has been met no reassessment unless significant changes occur
If criteria not met continue to assess if subsequently met
If consideration received before criteria met revenue only if:
No remaining obligation to transfer goods/services and full non-refundable consideration received
Contract terminated and consideration non-refundable
Recognise consideration as L until event above occurs or contract criteria met at the amount of consideration
R > O = Contract Asset
O > R = Contract Liability
Receivable Contract Asset
Unconditional right to consideration Conditional right to consideration
Wholly unperformed contract
NO contract exists if No performance from entity & No receipt of consideration
Step 2:
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
Identify the contract Identify the performance Determine the Allocate the transaction Recognise the revenue as/when
with the customer obligations in the contract transaction price price to the performance performance obligation is
obligation satisfied
C PO TP A R
Revenue Gains
Generated in course of ordinary activities Generated through abnormal transactions (disposals) – OCI / OI
Core Principle
Transfer of goods for an amount equal to the expected consideration entitled to
Step 1:
Customer is person contracted to obtain output of entity in exchange for consideration
Criteria to identify a contract
, Approved and parties committed to obligations
Rights identified
Pmt terms identified
Comm substance
Collection of consideration probable
Once the criteria has been met no reassessment unless significant changes occur
If criteria not met continue to assess if subsequently met
If consideration received before criteria met revenue only if:
No remaining obligation to transfer goods/services and full non-refundable consideration received
Contract terminated and consideration non-refundable
Recognise consideration as L until event above occurs or contract criteria met at the amount of consideration
R > O = Contract Asset
O > R = Contract Liability
Receivable Contract Asset
Unconditional right to consideration Conditional right to consideration
Wholly unperformed contract
NO contract exists if No performance from entity & No receipt of consideration
Step 2:
