Page 167 - F2 Integrated Workbook STUDENT 2019
P. 167
Revenue from contracts with customers
Revenue
1.1 The objective of IFRS 15
When should a company recognise revenue?
On despatch?
On delivery?
On signing of a contract?
On installation?
On completion?
On receipt of payment?
The answer is dependent on the terms and conditions of the sale and the type of
product on offer.
Consider the following companies. When do you think they would recognise
revenue?
Tesco? Tins of beans – at point of sale
Vodafone? Phone – on despatch to customer/POS, line rental – as
service provided
Kaplan? As courses progress
Balfour Beatty (construction)? As construction progresses
IFRS 15 sets out a 5 step process for the recognition of revenue from contracts with
customers to apply in all circumstances.
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