Every profit oriented organisation wants to maximise its profit, thus revenue. The core principle of IFRS 15 standard requires an entity to recognise revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for transferring those goods or services to the customer. A question arises, how can we define the consideration that an entity expects to be entitled to in exchange for goods? How to recognise revenue if within one contract we sell one good and also a service for a total price of CU 1,000 for example? What amount shall be recognised as revenue if customer can claim refund for 3 months after delivery?
There are many interesting questions related to revenue recognition. IFRS 15 standard does not distinguish between sales of goods, services or construction contracts. It defines transactions based on performance obligations satisfied over time versus point in time. This course explains the scope of IFRS 15 standard, after which the 5 step approach is explained in detail using practical examples and interim tests to enhance understanding.
This e-learning course is part of an e-learning series designed by PwC Academy Hungary which aims to provide a comprehensive overview of the application of IFRS (IAS) standards to finance and accounting experts who are already familiar with fundamental (local) accounting and reporting processes.