10.3.3.D
Over what period would an entity amortise a
sales commission (that is only paid once a
threshold is met) that is determined to be an
incremental cost to obtain a contract? ...................... 2277
10.3.3.E
Determining when to begin to amortise an
asset recognised for the incremental cost of
obtaining a renewal contract ...................................... 2278
10.3.3.F
Presentation of capitalised contract costs and
related amortisation in the statement of
financial position and statement of profit and
loss and other comprehensive income ..................... 2278
10.3.4 Impairment of capitalised costs ...................................................... 2279
11 IFRS 15 – PRESENTATION AND DISCLOSURE ......................................... 2281
11.1
Presentation requirements for contract assets and contract
liabilities ............................................................................................................... 2282
1970 Chapter 28
11.1.1
Implementation questions on presentation of contract
assets and liabilities ........................................................................... 2287
11.1.1.A
Determining the presentation of contract
assets and liabilities for contracts that contain
multiple performance obligations.............................. 2287
11.1.1.B
Determining the presentation of two or more
contracts that are required to be combined
under the standards ...................................................... 2288
11.1.1.C
Offsetting contract assets and liabilities against
other statement of financial position items
(e.g. accounts receivable) ............................................ 2288
11.1.1.D
Is a refund liability a contract liability (and,
thus, subject to the presentation and disclosure
requirements of a contract liability)? ........................ 2288
11.1.1.E
Accounting for a contract asset that exists
when a contract is modified if the modification
is treated as the termination of an existing
contract and the creation of a new contract ........... 2289
11.1.1.F
Determining when an entity has an
unconditional right to payment if it has not
transferred a good or service ...................................... 2289
11.2 Other presentation considerations ................................................................. 2290
11.2.1
Classifying shipping and handling costs in the income
statement ............................................................................................. 2290
11.3 Disclosure objective and general requirements ........................................... 2291
11.4 Specific
disclosure requirements ................................................................... 2292
11.4.1
Contracts with customers ................................................................ 2292
11.4.1.A
Disaggregation of revenue .......................................... 2294
11.4.1.B Contract
balances ......................................................... 2300
11.4.1.C Performance
obligations
.............................................
2305
11.4.1.D
Use of the ‘backlog’ practical expedient when
the criteria to use the ‘right to invoice’
practical expedient are not met .................................. 2314
11.4.2
Significant judgements ....................................................................... 2314
11.4.2.A
Determining the timing of satisfaction of
performance obligations ............................................... 2315
11.4.2.B
Determining the transaction price and the
amounts allocated to performance obligations ........ 2317
11.4.3
Assets recognised from the costs to obtain or fulfil a
contract ................................................................................................. 2319
11.4.4 Practical
expedients .......................................................................... 2322
11.5 Transition disclosure requirements ............................................................... 2322
11.6 Disclosures in interim financial statements .................................................. 2323
Revenue
1971
12 OTHER INCOME AND OTHER REVENUE .................................................... 2323
12.1 Income and distributable profits .................................................................... 2323
12.2 Interest
and
dividends
......................................................................................
2323
12.3 Disposal of non-financial assets not in the ordinary course of
business ................................................................................................................ 2324
12.3.1
Sale of assets held for rental ............................................................ 2325
12.4 Regulatory assets and liabilities ...................................................................... 2326
List of examples
Example 28.1:
Definition of completed contract: contract duration .................. 1984
Example 28.2:
Definition of completed contract: collectability .......................... 1987
Example 28.3:
Definition of completed contract: licences ................................... 1989
Example 28.4:
Definition of completed contract: loyalty programmes ............. 1991
Example 28.5:
Transition practical expedient for contract modifications ........ 1992
Example 28.6:
Cumulative effect of adoption under the modified
retrospective method ......................................................................... 1997
Example 28.7:
Identification of a customer ............................................................ 2003
Example 28.8:
Oral contract ........................................................................................ 2011
Example 28.9:
Collectability of the consideration .................................................. 2017
Example 28.10:
Duration of contract without a termination penalty .................. 2022
Example 28.11:
Unapproved change in scope and price ........................................ 2027
Example 28.12:
Modification of a contract for goods ............................................. 2030
Example 28.13:
Modification of a contract for goods .............................................. 2031
Example 28.14:
Modification resulting in a cumulative catch-up
adjustment to revenue ...................................................................... 2032
Example 28.15:
Explicit and implicit promises in a contract ................................. 2040
Example 28.16:
Identification
of performance obligations in a contract for
the sale of a real estate unit that includes the transfer of
land ....................................................................................................... 2054
Example 28.17:
IT outsourcing .................................................................................... 2061
Example 28.18:
Transaction processing ..................................................................... 2061
Example 28.19:
Hotel management ............................................................................ 2061
Example 28.20:
Goods or services are not distinct .................................................. 2062
Example 28.21:
Determining whether goods or services are distinct (Case
A and Case B) ..................................................................................... 2063
Example 28.22:
Determining whether goods or services are distinct
(Case C – Case E) .............................................................................. 2065
Example 28.23:
Promise to provide goods or services (entity is a principal)
(office maintenance service) ............................................................ 2077
1972 Chapter 28
Example 28.24:
Promise to provide goods or services (entity is a principal)
(airline tickets) .................................................................................... 2078
Example 28.25:
Arranging for the provision of goods or services (entity is an
agent) .................................................................................................... 2078
Example 28.26:
Entity is a principal and an agent in the same contract ............. 2079
Example 28.27:
Option that provides the customer with a material right
(discount voucher) ............................................................................. 2083
Example 28.28:
Variable consideration (IT outsourcing arrangement) ............... 2086
Example 28.29:
Customer option ................................................................................ 2087
Example 28.30:
Variable consideration (variable quantities of goods or
services) ............................................................................................... 2088
Example 28.31:
Customer option with no contractual penalties .......................... 2088
Example 28.32:
Customer option with contractual penalties ................................ 2089
Example 28.33:
Class of customer evaluation .......................................................... 2090
Example 28.34:
Volume discounts .............................................................................. 2091
Example 28.35:
Exercise of a material right under the requirements for
changes in the transaction price ..................................................... 2092
Example 28.36:
Volume discount incentive .............................................................. 2099
Example 28.37:
Consideration is not the stated price – implicit price
concession ........................................................................................... 2100
Example 28.38:
Evaluating the factors that could increase the likelihood or
magnitude of a significant revenue reversal ................................. 2109
Example 28.39:
Price concessions .............................................................................. 2109
Example 28.40:
Estimating variable consideration using the expected value
method ................................................................................................... 2111
Example 28.41:
Management fees subject to the constraint ................................... 2112
Example 28.42:
Right of return ..................................................................................... 2116
Example 28.43:
Significant financing component and right of return .................. 2123
Example 28.44:
Withheld payments on a long-term contract ................................ 2124
Example 28.45:
Determining the discount rate ......................................................... 2125
Example 28.46:
Advance payment and assessment of discount rate .................... 2125
Example 28.47:
Advance payment ............................................................................... 2126
Example 28.48:
Entitlement to non-cash consideration ......................................... 2133
Example 28.49:
Consideration payable to a customer ............................................ 2140
Example 28.50:
Non-refundable upfront fees ........................................................... 2142
Example 28.51:
Allocation methodology .................................................................... 2151
Example 28.52:
Measuring an option .......................................................................... 2157
Example 28.53:
Relative stand-alone selling price allocation ................................ 2159
Example 28.54:
Allocation when an entity is both a principal and an agent
in a contract ........................................................................................ 2160
Example 28.55:
Allocation of variable consideration ............................................... 2165
Example 28.56:
Allocating a discount .......................................................................... 2167
Revenue
1973
Example 28.57:
Arrangements with components outside the scope of the
standard .................................................................................................. 2171
Example 28.58:
Customer simultaneously receives and consumes the
benefits ................................................................................................. 2176
Example 28.59:
Asset has no alternative use to the entity ...................................... 2179
Example 28.60:
Assessing alternative use and right to payment ............................ 2182
Example 28.61:
Enforceable right to payment for performance completed
to date ................................................................................................... 2183
Example 28.62:
Assessing whether a performance obligation is satisfied at
a point in time or over time .............................................................. 2184
Example 28.63:
No alternative use ............................................................................... 2185
Example 28.64:
Determination of enforceable right to payment for a
contract priced at a loss ..................................................................... 2187
Example 28.65:
Uninstalled materials .......................................................................... 2197
Example 28.66:
Choosing the measure
of progress .................................................. 2198
Example 28.67:
Measuring progress when making goods or services
available ................................................................................................ 2198
Example 28.68:
Repurchase agreements (call option).............................................. 2211
Example 28.69:
Repurchase agreements (put option) .............................................. 2213
Example 28.70:
Bill-and-hold arrangement ............................................................... 2217
Example 28.71:
Accounting for the sale of a gift card ............................................. 2220
Example 28.72:
Customer loyalty programme .......................................................... 2221
Example 28.73:
Identifying a distinct licence (licence is distinct) ........................ 2225
Example 28.74:
Identifying a distinct licence (licence is not distinct) ................. 2233
Example 28.75:
Access to intellectual property ....................................................... 2235
Example 28.76:
Right to use intellectual property ................................................... 2236
Example 28.77:
Sales-based royalty for a licence of intellectual property......... 2240
Example 28.78:
Licensing contract with a declining royalty rate ......................... 2242
Example 28.79:
Access to intellectual property ....................................................... 2242
Example 28.80:
Application of the royalty recognition constraint to a
milestone payment ............................................................................ 2244
Example 28.81:
Accounting for a licence of intellectual property that is
satisfied over time in exchange for a minimum guarantee and
sales-based royalty .............................................................................. 2246
Example 28.82:
Service-type and assurance-type warranties .............................. 2255
Example 28.83:
Service-type and assurance-type warranty costs ....................... 2256
Example 28.84:
Fixed employee salaries ................................................................... 2260
Example 28.85:
Commissions paid to different levels of employees .................... 2261
Example 28.86:
Commissions paid to a pool of funds.............................................. 2261
International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards Page 389