The Navigator AASB 15 Revenue from contract with customers - Deloitte

The Navigator AASB 15 Revenue from contract with customers - Deloitte
The Navigator
AASB 15 Revenue from
contract with customers
The Navigator AASB 15 Revenue from contract with customers - Deloitte
The Navigator AASB 15 Revenue from contract with customers - Deloitte

About this guide                                                                  4

Overview                                                                          5

Step 1: Identify the contract with a customer                                     8

Step 2: Identify the performance obligation                                      11

Step 3: Determine the transaction price                                          15

Step 4: Allocate the transaction price                                           18

Step 5: Recognise revenue when (or as) the performance obligation is satisfied   20

Contract costs                                                                   23

Disclosures                                                                      26

Transition                                                                       28

The Navigator AASB 15 Revenue from contract with customers - Deloitte
About this guide

                                                                                                 This publication sets out an overview
AASB 15 Revenue from Contracts with              Application of AASB 15 is expected to
                                                                                                 of AASB 15. It summarises the key
Customers (‘AASB 15’ or ‘the standard’           have varying levels of impact across
                                                                                                 concepts underpinning the framework for
or ‘the new standard’) was issued by the         organisations and industries. In some
                                                                                                 recognition and measurement of revenue
Australian Accounting Standards Board            circumstances, the degree of complexity,
                                                                                                 and identifies areas where significant
(‘AASB’) in December 2014 based on IFRS          judgement and disclosure requirements
                                                                                                 judgement may be required. This guide
15 Revenue from contracts with                   will require substantial changes to an
                                                                                                 is neither intended to be exhaustive nor
customers (‘IFRS 15’) issued by the              organisation’s financial reporting systems
                                                                                                 provide solutions to all the issues relating
International Accounting Standards               and processes, while possibly resulting in
                                                                                                 to AASB 15, but rather aims to highlight the
Board (‘IASB’) in May 2014.                      the disclosure of commercially sensitive
                                                                                                 key requirements under the new standard
                                                                                                 and provide reference to the paragraphs
A number of implementation issues have
                                                                                                 and illustrative examples contained
emerged since the standard was published         For successful implementation, it is critical
                                                                                                 within AASB 15.
that are subject to ongoing discussion           that organisations do not focus only on
at the Joint Transition Resource Group           apparent differences between current
                                                                                                 We hope you will find this guide helpful
(‘TRG’), a panel formed by the IASB and          accounting standards and AASB 15. The
                                                                                                 and encourage you to consult where
the Financial Accounting Standards Board         full impact of AASB 15 can only be
                                                                                                 appropriate should you find yourself facing
(‘FASB’). As a result of these discussions, it   understood when contracts are assessed
                                                                                                 issues when interpreting and implementing
is expected that additional guidance will be     using the new guidance in its entirety.
                                                                                                 AASB 15. See for further
issued to provide clarity on certain parts of    Early assessment and planning will ensure
                                                                                                 insights into IFRS 15.
the standard.                                    implementation risks and exposures are
                                                 appropriately managed.

For successful implementation, it is critical
that organisations do not focus only on
apparent differences between current
accounting standards and AASB 15. The full
impact of AASB 15 can only be understood
when contracts are assessed using the new
guidance in its entirety.

The Navigator AASB 15 Revenue from contract with customers - Deloitte

A new accounting standard on                      from 1 July 2018. It is noted that, at the   Implementation of AASB 15:
revenue recognition:                              time of this publication, the IASB and       where to start?
• AASB 15 provides a new framework                AASB have issued an Exposure Draft           The core principles of the revenue
   for revenue recognition (when to               seeking comments in respect of the           model as described in the new Standard
   recognise revenue) and measurement             deferral of the effective date of IFRS15/    are as follows:
   (at what amount) following a five-step         AASB 15 to annual reporting periods
   approach. The new standard replaces            commencing on or after 1 January 2018,       When is revenue recognised?
   the existing accounting literature for         with early adoption still permitted          When or as the entity satisfies a
   revenue recognition which is currently      • AASB 15 will apply to contracts of            performance obligation by transferring
   spread across various standards and           not-for-profit (‘NFP’) entities that are      a good or service to a customer.
   Interpretations, both under IFRS and          exchange transactions. AASB 1004
   US GAAP                                       Contributions will continue to apply to       How much revenue is recognised?
• The mandatory effective date is for            non-exchange transactions until the           The amount that represents the
  reporting periods beginning on or after        income from transactions of not-for-          consideration to which the entity expects
  1 January 2018 with early adoption             profit entities project is completed by       to be entitled.
  permitted. For Australian entities with        the AASB. An exposure draft on this
  June year-ends, AASB 15 will be effective      project was issued in May 2015.

The core principles are supported by the following five steps and disclosure requirements,
as discussed in this document:

Step 1:                Step 2:                 Step 3:                 Step 4:                 Step 5:
Identify the           Identify separate       Determine the           Allocate the            Recognise revenue
contract(s) with       performance             transaction price       transaction price       when(or as) each
the customer           obligations in the      [AASB 15.47–72;         to separate             performance
[AASB 15.9–21]         contract                87–90]                  performance             obligation is
                       [AASB 15.22–30]                                 obligations             satisfied
                                                                       [AASB 15.73–86]         [AASB 15.31–46]

Contract Costs         Disclosures
[AASB 15.91–104]       [AASB 15.110–129]

The Navigator AASB 15 Revenue from contract with customers - Deloitte
AASB 15 is not merely a financial reporting issue:
The requirements of the standard are such that they may have a widespread impact on an organisation. Apart from preparing
the market and educating analysts and shareholders on theimpact of the new standard, entities will need to consider wider
implications. Amongst others, these may include:

Management and                                 Commercial                                     Financial
information systems                                                                           compliance

            System                                        Contract                                        Bank loans
            changes                                       management

Assessing data capture and reporting           Factoring the impact of AASB 15 into           Assessing the likely impact of AASB 15
capabilities to identify gaps in the current   the entity’s assessment of new contracts       on the entity’s revenue and profit profile
systems and upgrading IT systems, internal     that are currently being negotiated to         when entering into new banking facilities
processes and controls where required.         manage exposure.                               and negotiating covenants.

            Forecasts                                     Employees                                       Taxation

Factoring the impact of the new                Understanding remuneration schemes,            Assessing the potential impact on
standard on both the timing and amount         the impact of the standard on the timing       taxable income and deferred taxes to
of revenue recognised into any profit          of targets being achieved and the likelihood   identify changes to the profile of tax
forecasts that the entity prepares.            of targets being met. This may prompt a        cash payments, if any.
                                               revision to KPIs. Entities need to identify
                                               appropriate communications and training
                                               needs of employees to maintain employee
                                               engagement and effectively project manage
                                               the implementation of AASB 15.

• Revenue recognition under AASB
  15 will primarily be based on a
  set of principles that will require
  the determination of numerous
  estimates and extensive use of
  judgement, while certain parts of
  the standard are rules based and                           The
  prescriptive in nature. In some                            here

  cases irreversible elections will
  need to be made
• AASB 15 introduces new
  complexities both for the timing
  of revenue recognition and
  the quantum of revenue to be
  recorded. For a complete and
  effective implementation, entities    Plan the implementation process:
  will need to embrace the new          The extent of impact will differ from entity to entity. Early assessment and planning will
  model in this standard rather         ensure implementation risks and exposures are appropriately managed. Some of the key
  than assessing the changes from       activities to be considered in developing a tailored project plan are set out below:
  the existing guidance only. The
  impact of AASB 15 can only be
  fully understood when material              Assess the impact                               Design the solution
  contracts and transactions are
  assessed using the new guidance       • Establish project management team            • Draft the implementation plan
  in its entirety                       • Identify stakeholders and assess             • Design and develop accounting, systems
• There are significant additional        their needs                                    and process solutions
  disclosure requirements. This         • Evaluate significant revenue streams         • Pilot testing of solution design.
  will have a pervasive impact            and their components
  and entities will need to assess                                                           Implement the plan
                                        • Identify, evaluate and summarise
  whether appropriate systems and
                                          key contracts                                • Deployment of accounting systems and
  processes are in place to collate
                                        • Capture and define key accounting              process solutions across organisation
  the required information and to
                                          issues and new policy requirements           • Training of employees.
  assess where disclosures may
  contain sensitive information         • Determine additional disclosure needs
                                                                                             Review the results
• Entities will need to maintain dual   • Analyse data capture requirements,
  systems and accounting records          capabilities and identify gaps
                                                                                        • Post implementation review, verification
  to comply with the transition         • Assess other potential process and              and monitoring.
  requirements of the standard            business impacts, e.g. KPI, bonus
• Early planning is critical to           structures, forecasting,
  ensure implementation risks and         loan covenants, etc.
  exposures are managed.

Step 1: Identify the
                 contract with a customer

AASB 15 only applies where a contract           The standard may be applied                    Has the transaction been approved
exists and where that contract is with a                                                       and have the parties committed to
customer [AASB 15.6].
                                                on a portfolio basis if (a) it is              their respective obligations?
                                                applied to a group of contracts
A customer is a party that                      (or performance obligations)                   Can the entity identify each party’s
has contracted with an entity                   with ‘similar characteristics’                 rights regarding goods/services to
to obtain goods or services                     and (b) the entity ‘reasonably
                                                                                               be transferred?

that are an output of the                       expects’ that the effects on                   Can the entity identify the payment
entity’s ordinary activities in                 financial statements are not                   terms for the goods/services to
exchange for consideration.                                                                    be transferred?
                                                ‘materially different’ to the
The new standard specifically scopes            effects of applying the standard               Is there commercial substance?
out lease contracts, financial instruments,     on a contract by contract basis.               Is the collection of consideration
insurance contracts and non-monetary
                                                                                               probable based on the customer’s
exchanges between entities in the same          Demonstrating that there is no material        ability and intention to pay?
trade [AASB 15.5]. However the sale of          difference in applying the standard on a
certain non-financial assets that are not       portfolio basis vis-a-vis on a contract by
an output of an entity’s ordinary activities,   contract basis can be very complex.
e.g. sale or transfer of property, plant
                                                Once within scope, the requirements
and equipment, will be scoped into
                                                relating to modifications of contracts and
this standard.
                                                contract combination must be considered.
Although a gain or loss on this type of
sale generally does not meet the                In-scope contracts:
definition of revenue, an entity should         When does a contract exist?
apply the guidance in AASB 15 relating to       An entity should account for a contract with
the transfer of control and measurement         a customer that is in the scope of AASB 15
of the transaction price, including the         when all of the following criteria are met
constraint on variable consideration, to        [AASB 15.9]:
evaluate the timing and amount of the
gain or loss to be recognised.                  A contract is an agreement
The standard is to be applied and               between two or more parties
assessment made on a contract by
contract basis, except where an entity
                                                that creates enforceable rights
elects and meets the criteria to apply a        and obligations.
‘portfolio approach’ [AASB 15.4].

Further considerations:                                 • Contract does not exist: If the criteria
It is important to consider the following                 for determining whether a contract
additional guidance when making                           exists are not met, the entity should
this assessment:                                          continue to assess the contract to
• Contract approvals: Agreements                          determine whether those criteria are
  can be verbal, written or implied. The                  subsequently met [AASB 15.14].
  focus is on whether there are ‘legally                   Any consideration received in the
  enforceable rights and obligations’                      absence of a contract is recorded as
  [AASB 15.10]                                             a liability until (a) all the obligations
                                                           are fulfilled and the amount is
• Contract combination: Contracts
                                                           non-refundable or (b) the agreement is
  entered into at (or near) the same
                                                           terminated and the amount received is
  time with the same (or related)
                                                           non-refundable [AASB 15.15–16].
  customer should be combined if any
  one of the following criteria is met:
   – Contracts have a single                            A modification is a change to an existing
     commercial objective                               contract which changes the scope of the
   – Consideration or performance under                 contract and/or the price of the contract.
     the contracts is interdependent                    A contract modification exists when the
   – Promised goods or services are a                   parties to the contract have approved
     single performance obligation                      the modification either in writing, orally
      [AASB 15.15–17]                                   or based on their customary business
                                                        practices [AASB 15.18–19].

                                                          Account for modification
  Does the modification add                   No          through a cumulative ‘catch-up
  distinct* goods/services?                               adjustment’ on the existing


                                                          Account for modification as
  Does the contract price                                 the termination of the existing
  increase by an amount that                              contract and creation of a
  reflects the standalone                                 new contract (prospective
  selling price** of the                                  adjustment)
  additional distinct goods/


  Account for modification as
  a separate contract to the
  existing contract

* The concept of 'distinct' is discussed in Step 2 Identify the performance obligation.
** The concept of ‘standalone selling price’ is discussed in Step 4 Allocate the transaction price.

To consider:                                    • In some circumstances, the determination of whether a contract falls within
                                                              the scope of AASB 15 or another standard requires significant judgement.
                                                              Entities will need to factor in the possibility that a contract may only be
• Is there a contract?
                                                              partially in scope of AASB 15; e.g. a contract for the lease of equipment and
• Is the contract scoped out of                               the provision of services may need to be assessed separately under the
  the standard?                                               accounting standard for leases and this standard
• Will the Standard be applied to a                         • When applying the standard to account for the gain or loss arising on the sale
  portfolio of contracts or on a                              of non-financial assets, e.g. the sale of buildings, an entity needs to take note
  contract-by-contract basis?                                 of any repurchase clauses included in the agreement. If any such clause exists,
• Are there any side agreements/multiple                      entities will be required to apply the AASB 15 guidance relating to repurchase
  agreements which need assessment                            agreements, which is discussed further in Step 5
  for contract combination?                                 • An entity needs to exercise significant judgement to evaluate whether
• Have any of the contractual                                 contracts have ‘similar characteristics’ and to establish a ‘reasonable
  terms changed?                                              expectation’ that the effects of using a portfolio approach would not differ
• Do factors exist which can lead to a                        materially from those of applying the guidance at a contract or performance
  modified contract, e.g. change in                           obligation level. There is a need for documented support of such assessment
  scope and/or price?                                       • An entity should first determine whether it expects to accept a lower amount
                                                              of consideration from the customer than what the customer is obligated to
                                                              pay, i.e. offer a price concession to the customer, before assessing whether
                                                              collectability is ‘probable’. Collectability will then be based on the lower
                                                              amount of consideration
                                                            • Legal enforceability depends on the interpretation of the law and could vary
                                                              across legal jurisdictions
                                                            • Robust systems are required to identify and significant judgement is required
                                                              to ascertain how to account for contract modifications
                                                            • When accounting for contract modifications where a scope change has been
                                                              agreed without a corresponding approval of price, entities need to consider
                                                              the guidance on estimating variable consideration. Consideration should
                                                              be given to all facts and circumstances, including, but not limited to, prior
                                                              experience with similar modifications, in determining whether the price
                                                              change will be approved by the customer.

            AASB 15 reference:
            AASB 15.5–21; Appendix A

Illustrative Examples:                     for identifying a contract           Example 8 – Modification resulting in
                                           Example 5 – Modification of a        a cumulative catch-up adjustment
Example 1 – Collectability of              contract for goods                   to revenue
the consideration                          Example 6 – Change in the            Example 9 – Unapproved change in
Example 2 – Consideration is not the       transaction price after a contract   scope and price
stated price – implicit price concession   modification
Example 3 – Implicit price concession      Example 7 – Modification of a        Basis for Conclusions: BC28–BC83
Example 4 – Reassessing the criteria       services contract

Step 2: Identify the
                  performance obligation

A performance obligation is the level           Criteria for a good/service
at which an entity needs to ascertain           being ‘distinct’:
the timing and quantum of revenue               Entities will need to identify all promised
to be recognised.                               goods/services in the contract and assess
                                                whether these goods/services
How is a performance                            are distinct on their own or in combination
obligation identified?                          with other goods/services. The following
A performance obligation can be either          guidance should be used when making
(a) a good/service that is distinct or (b) a    this assessment [AASB 15.26–30]:
series of distinct goods/services that are
substantially the same and have the same
pattern of transfer to the customer [AASB
15.22]. Identification and determination
of performance obligations takes place
at contract inception and will not change
unless there is a contract modification.

  Are there                  Can the                   Is the good/service separable from other promises in the
  multiple                   customer                  contract; i.e. is it distinct within the context of the contract?
  goods/                     benefit from              Satisfying one of the following factors is indicative that the
  services                   the good/                 good/service is separable from other promises in the contract
  promised in                service on                [AASB 15.29]:
  the contract?              its own or
                                                       • There is no significant service of integrating the good/service
                             with readily
                      Yes                      Yes       with other goods/services promised in the contract
                             resources;                • The good/service does not significantly modify or customise
                             i.e. is it                  another good/service promised in the contract
                             capable                   • The good/service is not highly dependent on, or highly
                             of being                    interrelated with, other goods/services promised in
                             distinct?                   the contract.

     No                        No

  Treat the                  Combine                                                    Yes
  identified                 goods/
  good/service               services
  as a single                until two or
  performance                more goods/
  obligation as              services are              Account for the good/service as a separate performance
  it is ‘distinct’.          distinct.                 obligation as it is ‘distinct’.

Example of goods/services that                         However, the goods/services are not             Further considerations:
are not distinct                                       distinct within the context of the contract     Warranties:
An entity (contractor) enters into a                   as the entity’s promise to transfer             Entities often provide customers with
contract to build a hospital for a customer.           individual goods/services in the contract       a warranty in connection with the sale
The entity is responsible for the overall              are not separately identifiable from other      of goods/services, which can take many
management of the project and identifies               promises in the contract. This is evidenced     different forms varying across industries
various goods/services to be provided,                 by the fact that the entity provides a          and jurisdictions, whether explicitly
including engineering, site clearance,                 significant service of integrating the          contained within the contract or implicit as
foundation, procurement, construction of               goods/services (the inputs) into the hospital   a result of customary business practice or
the structure, piping and wiring, installation         (the combined output) for which the             legal requirements [AASB15.B28].
of equipment and finishing.                            customer has contracted.
                                                                                                       An entity should assess the nature of the
The promised goods/services are capable                Since both criteria are not met, the            warranty to determine the appropriate
of being distinct since the customer can               goods/services are not distinct. The entity     accounting [AASB 15.B29 – B33].
benefit from them either on their own                  will account for all of the goods/services
or together with other readily available               in the contract as a single performance
resources. This is evidenced by the fact               obligation. A careful assessment of specific
that the entity, or competitors of the                 facts and circumstances will be required
entity, regularly sells many of these goods/           to determine the appropriate accounting
services separately to other customers.                treatment in these scenarios.

  Does the customer have                   No        Does the warranty provide the                No     Assurance warranty to
  the option to purchase the                         customer with a service in addition                 be accounted for as a cost
  warranty separately?                               to the statutory product warranty?                  accrual under AASB 137*.

                           Yes                                               Yes

  Service-type warranty to be accounted for as a separate performance obligation
  under AASB 15. A portion of the transaction price is allocated to the warranty
  and revenue will be recognised as and when the warranty service is performed.

* AASB 137 Provisions, Contingent Liabilities and Contingent Assets.

Example                                            Set-up activities:
A television is sold to a customer with a          Activities that an entity undertakes
statutory warranty period of two years             to fulfil a contract that do not transfer
and allowing the customer an option to             goods/services to the customer, e.g.
purchase an additional two year warranty.          administrative tasks to set up a contract,
The statutory warranty will be accounted           are not performance obligations. In some
for as a cost accrual under AASB 137 while         circumstances, a careful analysis will be
the additional warranty will be accounted          required to determine if set-up activities
for as a separate performance obligation           have transferred a distinct good/service to
under AASB 15.                                     the customer [AASB 15.25]. Entities may be
                                                   able to capitalise costs incurred on these
Option to acquire additional                       set-up activities if certain criteria are met.
goods/services:                                    For further discussion on capitalisation
Contracts with customers may contain               of contract costs, refer to the section on
rights that provide the customer with              Contract costs in this guide.
an option to purchase additional goods/
services for free or at a discount, e.g.           Implicit promises in a contract:
sales incentives, customer award credits           A contract with a customer may contain
or points, contract renewal options, and           promises which are implied by the entity’s
discounts on future goods/services                 customary business practices, published
 [AASB 15.B39]. An entity is required to           policies or statements, e.g. an entity
account for the customer option to acquire         advertises to provide free maintenance
additional goods/services as a separate            services in a marketing campaign. If at
performance obligation if the option               the time of entering into the contract,
provides the customer with a material              such promises create a valid expectation
right [AASB 15.B40].                               of the customer that additional goods/
                                                   services will be delivered and the goods/
                                                   services are ‘distinct’, then the entity should
                                                   not recognise revenue until such goods/
                                                   services are delivered [AASB 15.24].

                                                         Does the option give the
  Could the customer obtain
                                             No          customer the right to acquire
  the right to acquire additional
                                                         additional goods/services at a
  goods/services without entering
                                                         price that reflects the
  into the sale agreement?
                                                         stand-alone selling price for
                                                         those goods/services?
            Yes                                                                 No

  The option does not give rise                          The option is a material right
  to a separate performance                              that gives rise to a separate
  obligation.                                            performance obligation.

To consider:                                 • Assessment of performance obligations must be made at contract inception
                                                        • Significant judgement is required when assessing the ‘distinct’ criteria for a
                                                          promised good/service, especially in relation to determining whether the good/
• Are there multiple deliverables in
                                                          service is ‘distinct within the context of the contract’. The assessment of when
  the contract?
                                                          to separately identify and account for a performance obligation in accordance
• For contracts with several deliverables,                with this guidance has posed significant challenges to date and has been subject
  can the customer benefit from any of                    to debate at the Joint Transition Resource Group. The IASB may issue additional
  the deliverables independently or using                 guidance to clarify
  a readily available resource?                           this criterion
• What happens if the entity never sells                • Only those activities performed by an entity that result in the transfer of a good
  the goods/services separately?                          or service to a customer can give rise to a separate performance obligation.
• Does the entity provide an integrated                   In some circumstances a careful analysis of activities is required to determine
  good/service?                                           whether a separate performance obligation exists or whether the activity is
• Is there is a significant modification or               part of delivering a performance obligation, e.g. set up activities, mobilisation of
  customisation involved for the good/                    resources
  service to be delivered?                              • An entity needs to carefully assess whether there are any implied promises in
• Would a customer buy one good/service                   the contract as implied promises can lead to revenue deferral until the implied
  without the other in the bundle?                        promise to transfer the good/service is met.
• Does the activity performed by the entity
  result in the transfer of a good/service
  to the customer?

             AASB 15 reference:
             AASB 15.22–30; B28–B33; B39–B43; B52–B56

Illustrative Examples:

Example 10 – Goods and services are not distinct
Example 11 – Determining whether goods or
services are distinct
Example 12 – Explicit and implicit promises in a

Basis for Conclusions: BC84–BC116

Step 3: Determine the
               transaction price

As and when a performance obligation          Variable consideration:                         Conditions which enhance the risk of
is satisfied an entity should recognise       Variable consideration includes discounts,      cumulative revenue recognised being
revenue to the extent of the transaction      rebates, refunds, credits, incentives,          reversed include:
price allocated to that performance           performance bonuses/penalties,
                                                                                              • Amount is highly susceptible to factors
obligation taking into account the impact     contingencies, price concessions, or similar
                                                                                                outside the entity’s influence
of constraints arising from variable          items. Variability in consideration can arise
consideration [AASB 15.46].                   from either the amount being:                   • Uncertainty is not expected to be
                                                                                                resolved for a long period of time
The transaction price is the                  • Variable as explicitly stated in the
                                                                                              • The entity has limited experience with
                                                contract or arising from customary
amount of consideration to                      business practice of the entity or
                                                                                                similar contracts or does not have
                                                                                                adequate data to predict value
which the entity is expected                  • Fixed but its receipt is contingent on the
                                                                                              • The entity has a practice of offering price
to be entitled in exchange for                  occurrence of a future event.
                                                                                                concessions or changing payment terms
transferring a promised good/                 An entity needs to estimate the amount of
                                                                                              • The contract has a large number and
                                              variable consideration to which it will be
service to a customer.                        entitled, taking into account the recognition
                                                                                                broad range of possible price variations.

                                              threshold described below [AASB 15.50,
The transaction price is estimated by the                                                     Variable consideration is measured using
                                              56]. The recognition threshold limits rather
entity at contract inception. The estimate                                                    one of the following methods:
                                              than precludes revenue recognition.
is updated at each reporting date for any
                                                                                              • Expected value – sum of probability-
changes in circumstances which will include
reassessment of any variable component
                                              Recognition threshold                             weighted amounts in a range of possible
identified and relevant modifications         Variable consideration is
                                                                                              • Most likely amount – single most likely
to the contract.                              included in the transaction                       amount, if outcome is binary in nature.
What impacts the amount of revenue?
                                              price to the extent it is highly
The nature, timing and amount of              probable that a significant
consideration promised by a customer          reversal in the amount of
affects the estimate of the transaction
price. When determining the transaction
                                              cumulative revenue recognised
price an entity should consider all           will not occur when the
of the following:                             uncertainty is subsequently

Significant financing component:               A contract with a customer will not have a       A careful assessment of specific facts
An entity is required to consider all facts    significant financing component if any of        and circumstances will be required to
and circumstances to ascertain if a contract   the following factors exist:                     determine the appropriate accounting
contains a significant financing component.                                                     treatment in these scenarios.
                                               • The amount is paid by the customer
If a significant financing component
                                                 in advance but the timing of receipt
exists consideration is allocated between                                                       Right of return:
                                                 of goods/services is at the
revenue and interest expense or interest                                                        Many entities offer their customers a
                                                 customer’s discretion
income depending on whether the entity                                                          right to return purchased products. This
                                               • A substantial amount of consideration is
has received financing from its customer                                                        right of return can take different forms,
                                                 variable and based on occurrence of
(advance payments) or provided financing                                                        e.g. entitling a customer to a full or partial
                                                 a future event
to its customer (deferred payments)                                                             refund of the amount paid, a credit against
                                               • The timing difference in delivery of
[AASB 15.61]. As a practical expedient, if                                                      the value of previous or future purchases,
                                                 goods/services and payment occurs for
the time gap between delivery of goods/                                                         or an exchange of one product for another
                                                 reasons other than financing,
services and payment is one year or less,                                                       [AASB 15.B20]. Understanding the rights
                                                 e.g. the customer retains payments
an entity does not need to adjust the                                                           and obligations of both parties in an
                                                 (retentions) as a protective mechanism
consideration for the effects of financing                                                      arrangement when return rights exist
                                                 for the performance of an appropriate
[AASB 15.63].                                                                                   is critical to determining the accounting
                                                 quality of work by the entity.
In determining whether a significant                                                            [AASB 15.B21].
financing component exists, consider:
                                               Non-cash consideration:
• The difference in the amount of                                                               Example
                                               Any non-cash consideration received from
  consideration and the cash selling                                                            An entity sells 100 units for $50 each.
  price – a significant difference indicates   a customer needs to be included when
                                                                                                Each unit has a cost of $10 and the entity
  the existence of an implicit financing       determining the transaction price and
                                                                                                expects that 15 units will be returned. As
  arrangement                                  should be measured at its fair value. If the
                                                                                                the entity expects to refund the sales price
• The combined effect of:                      form of consideration, e.g. shares of the
                                                                                                when the customer returns the goods,
     – Expected time lag between delivery      customer, makes its fair value variable,
                                                                                                the following should be recognised by the
       of goods/services and payment. The      then it is reflected in the assessment of the
       longer the time gap, the greater        transaction price and is not subject to the
       the possibility that a financing                                                         • Revenue, but only to the extent of the
                                               constraint on variable consideration
       component exists                                                                            entity’s expectation that the customer
                                               [AASB 15.66–69].
     – Prevailing interest rates in                                                                will not return the goods; i.e. 85 units
       the market.                                                                                 at $50 each
                                               Consideration payable to customer:
                                                                                                • A refund liability for the portion
                                               Consideration paid to a customer is
If a significant financing                     accounted for as a reduction of revenue
                                                                                                   expected to be returned, i.e. 15 units
                                                                                                   at $50 each
component exists, the entity                   unless the payment relates to the customer
                                                                                                • An asset with a corresponding
                                               providing distinct goods/services to the
should measure the interest                                                                        adjustment to cost of sales for the right
                                               entity in which case it is recorded as a
income or expense using a                      separate transaction with the customer
                                                                                                   to recover products from customers on
                                                                                                   settling the refund liability, i.e. 15 units
discount rate that reflects the                [AASB 15.70–72].
                                                                                                   at $10 each.
rate that would be used in a
separate financing transac-                    If the customer provides advertising
tion between the entity and                    services for the entity’s products and
                                               is paid fair value by the entity, then
its customer. This rate should
                                               the amount paid to the customer will
reflect the credit risk of the                 be viewed as a cost of advertising for
party obtaining financing in the               the entity; while an amount paid to the
                                               customer to place the products in a
arrangement which could be
                                               favourable location (‘slotting’) in the retail
the entity (if receiving advance               store may not result in a separate service
payments) or the customer                      being provided by the customer to the
                                               entity, thus resulting in the entity recording
(if making deferred payments).
                                               the amount as a reduction of revenue.

To consider:                              • When an entity is considering whether a contract contains a significant financing
                                                        component or is assessing the highly probable threshold for recognition of
                                                        variable consideration, it needs to exercise significant judgement which will
• Does the entity offer variable pricing                require additional documentation and disclosure
  to its customers, either through
                                                      • Entities will need to assess different types of variable consideration in
  customary business practice or
                                                        their business
  as per the contract; e.g. discounts,
  rebates, performance bonuses,                       • In some cases the entity may be subject to liquidated damages or penalties that
  refunds, penalties?                                   may result in the entity not recognising revenue or recognising a net expense

• Are there any contingent events,                    • Entities need to be aware of the different thresholds to be applied for assessing
  the occurrence of which will trigger                  ‘collectability’ in Step 1 and the ‘variable consideration constraint’ in Step
  consideration from the customer?                      3. Assessment of ‘collectability’ is based on a ‘probability’ threshold while
                                                        constraining the amount of variable consideration to be recognised is based on
• Does the entity have adequate data to
                                                        a ‘highly probable of no significant reversal’ threshold. Once revenue has been
  estimate the variable consideration?
                                                        recognised any bad debt provision is assessed on the gross amount of revenue
• Have there been any changes in the                    recognised and the bad debt is recognised as an expense
  transaction price since inception of
                                                      • If an entity receives upfront payments or cash advances from a customer it
  the contract?
                                                        will need to assess the existence of an implicit financing transaction, in which
• Is there a time lag between collection of             case the amount of revenue recognised will be adjusted with a corresponding
  money and delivery of goods/provision                 interest expense recognised in the income statement
  of services?
                                                      • There are now specific requirements in the standard in relation to the
• Does the entity have any ‘buy now, pay                measurement of non-cash consideration and how to account for any amounts
  later’ offers?                                        that an entity may pay to its customers
• Are there any provisions for the                    • If the contract contains a significant financing component, the discount rate
  customer to pay by a means other                      used for measuring the interest income or expense is not the implicit rate in
  than cash or credit, e.g. shares of the               the contract, rather it is the market interest rate reflecting the credit risk of the
  customer or other goods/services                      party obtaining the finance. Accordingly if multiple customers make deferred
  provided by the customer?                             payments, an entity may recognise different revenue amounts for contracts with
• Does the entity pay any amount                        similar terms if the credit profiles of the customers differ.
  to the customer? If so, what is the
  reason for such a payment?

           AASB 15 reference:
           AASB 15.46–72; B20–B27

Illustrative Examples:              Example 24–Volume discount           Example 27 – Withheld payments     non-cash consideration
                                    incentive                            on a long-term contract            Example 32 – Consideration payable
Example 20–Penalty gives rise to    Example 25–Management fees           Example 28 – Determining the       to a customer
variable consideration              subject to the constraint            discount rate
Example 21–Estimating variable      Example 12 – Explicit and implicit   Example 29 – Advance payment and   Basis for Conclusions:
consideration                       promises in a contract               assessment of the discount rate    BC181–BC265
Example 22–Right of return          Example 26 – Significant financing   Example 30 – Advance payment
Example 23–Price concessions        component and right of return        Example 31– Entitlement to

Step 4: Allocate the
                transaction price

After determining the transaction price          In some circumstances stand-alone selling     Example
at Step 3, Step 4 specifies how an entity        prices are not observable and therefore       Entity X enters a contract with a customer
should allocate that transaction                 an entity may need to estimate the stand-     to sell goods/services A, B and C for $100.
price between the various performance            alone selling price of a performance
obligations identified in Step 2. This is        obligation using one of the following              A               B                C
particularly relevant when the timing of         approaches [AASB 15.79]:
revenue recognition varies for each of the
                                                 1. Adjusted market assessment
performance obligations.
                                                    approach: based on the current market,
What is the basis of allocation?                    estimate the price that customers would
Stand-alone selling price:                          be willing to pay for the good/service
                                                                                               The stand-alone selling prices are
The transaction price should be allocated        2. Expected cost plus margin approach:        estimated as follows:
to each performance obligation based on             determine the expected cost to satisfy
the relative stand-alone selling prices of the      the performance obligation and             Item A –
goods and services being provided to the            add an appropriate margin                  Directly observable price $50
customer [AASB 15.76].                           3. Residual approach: deduct all stand-       Item B –
The best evidence of a stand-alone selling          alone selling prices of the other goods/   Adjusted market assessment approach $25
price is the price the entity charges for           services from the total transaction
                                                                                               Item C –
each good/service when selling them                 price and allocate the residual to the
                                                                                               Expected cost + margin approach $75
separately to similar customers and under           remaining good/service.
similar circumstances [AASB 15.77].                                                            The customer receives a discount for
                                                 The existence of variable
                                                                                               purchasing the bundle of goods and
At inception of the contract                     consideration [AASB 15.84–86],                services, because the sum of the stand-
the stand-alone selling price                    discounts [AASB 15.81–83] or                  alone selling prices ($150) exceeds the
should be determined together                    changes to the transaction                    promised consideration ($100).

with the allocation of the                       price after inception of the                  The discount is allocated proportionally to
                                                                                               all performance obligations unless there
transaction price to various                     contract [AASB 15.87–90]                      is observable evidence that the entire
performance obligations.                         will require a careful analysis               discount relates to one or more specific
The basis of the allocation                      to determine whether                          performance obligation(s) in the contract.

cannot change at a later                         any of these items should                     Allocation of transaction price $100:
date [AASB 15.88].                               be allocated to a specific                    A $33 = $50 / $150 x $100
                                                 performance obligation or on a                B $17 = $25 / $150 x $100
                                                                                               C $50 = $75 / $150 x $100
                                                 pro-rata basis across multiple
                                                 performance obligations.

To consider:                            • AASB 15 contains reasonably prescriptive guidance on recognition and
                                                      measurement of revenue arising from contracts containing bundled goods/
                                                      services while the existing accounting standards contain very little in terms of
• Does the entity regularly offer bundled             this requirement. Accordingly this could be an area of significant change for
  pricing on products it sells separately?            some entities and entities will need to consider whether their existing systems
• Does the entity provide discounts on                and processes are capable of allocating the transaction price in accordance with
  bundled goods/services which need to                the new standard
  be allocated?                                     • The transaction price must be allocated to goods/services irrespective of
• Has the entity offered a discount for               whether an observable price exists. There is no exception available due to a ‘lack
  only one good/service within a bundle?              of reliable information
• Is there variable consideration which             • The relative stand-alone selling price of each performance obligation is
  requires allocation?                                determined at contract inception and is not reallocated to reflect subsequent
• Are stand-alone selling prices                      changes in stand-alone selling prices.
• Is there a need to allocate changes
  in the transaction price to individual
  performance obligations?

              AASB 15 reference:
              AASB 15: 73–90

Illustrative Examples:

Example 33 – Allocation methodology
Example 34 – Allocating a discount
Example 35 – Allocation of variable consideration

Basis for Conclusions: BC266–286

Step 5: Recognise revenue when (or as)
                the performance obligation is satisfied

The final step is to determine, for each        Satisfaction of performance obligations:        • An entity’s selection of an input method
performance obligation, when revenue            At contract inception an entity needs to          (e.g. percentage cost completion
should be recognised.                           determine whether control of a good/              method) or an output method
                                                service transfers to the customer over            (e.g. assessing value transferred) for
When to recognise revenue?                      time or at a point in time using the criteria     this purpose is not an accounting policy
An entity recognises revenue as and when        below [AASB 15.35–37]. This determination         choice, rather the method selected
each performance obligation is satisfied by     is not expected to change over the life of        must be able to best depict the pattern
transferring control of a promised good/        the contract. For all other performance           of transfer of goods/services to the
service to the customer [AASB 15.31].           obligations, revenue is recognised at a           customer [AASB 15.41–45].
                                                point in time.
Control is the ability to                       Measurement of progress:
direct the use of and obtain                    • For revenue recognised over time, an
                                                  entity needs to measure the progress
substantially all of the benefits                 towards complete satisfaction of
from the goods/services and/                      the performance obligation with the
or the ability to prevent others                  objective of recognising revenue that
                                                  depicts the entity’s performance in
from obtaining benefits from                      transferring control of the goods/
the use of the goods.                             services to the customer [AASB 15.39]

  Customer                                 Seller’s performance                 Seller’s performance does
  simultaneously                           creates or enhances an               not create an asset with
  receives and consumes                    asset controlled by           or     an alternative use to the
  benefits of a                            the customer.                        seller AND the seller has an
  good/service.                                                                 enforceable right to payment.

                                           Revenue recognised
                                           over time.

For performance obligations satisfied at a
point in time, an entity is required to assess
when control has been transferred to the
customer by considering the following
indicators [AASB 15.38].

Customer has             Customer                  Customer has             Customer has            Entity has
legal title              has physical              significant risks        accepted the            present right
                         possession                and rewards of           goods/services          to payment

Not all of the above indicators need to be
present for an entity to conclude that it has
transferred control to a customer.

When evaluating whether a customer has
obtained control of the goods/services, an
entity should consider the existence of any
repurchase agreements [AASB 15.34].

Application guidance in specific circumstances

Repurchase agreements:                           Repurchase rights are an obligation or right to repurchase a good after it is sold to a
                                                 customer, which can take the form of a put option, a call option or a forward contract. The
                                                 existence of these clauses can have a significant impact on the accounting for the contract.
                                                 Depending on the facts and circumstances, the arrangement may be recorded as a sale, a
                                                 lease contract or as a financing agreement [AASB 15.B64–B76].

Customers’ unexercised                           When an entity receives a non-refundable prepayment from the customer, e.g. sale of gift
contractual                                      cards, gift certificates or lay-by sales, the customer has an unexercised right to receive
rights:                                          goods/services in the future, which some customers may not use (typically termed as
                                                 ‘breakage’). An entity is required to consider whether or not the customer will eventually
                                                 exercise their rights which will impact the entity’s pattern of revenue recognition
                                                 [AASB 15.B44–B47].
Consignment arrangements,                        An entity must consider the existence of these arrangements when determining the point
bill-and-hold arrangements:                      in time that it transfers control to the customer as this could impact the timing of revenue
                                                 recognition [AASB 15.B77–B82].

Non-refundable upfront fees:                     If contracts include non-refundable upfront fees from customers, revenue recognition
                                                 should be delayed if the fees relate to future goods/services to be transferred to the
                                                 customer [AASB 15.B48–B51].

License:                                         If the licence of intellectual property is considered a separate performance obligation, an
                                                 entity is required to assess the nature of the licence to determine whether to recognise
                                                 revenue at a point in time or over time [AASB 15.B52–B62]. An entity should recognise a
                                                 sales-based or usage-based royalty only on the occurrence of the subsequent sale or
                                                 usage [AASB 15.B63].

To consider:                              • Revenue recognition over time is not limited to only service arrangements.
                                                        Depending on the terms of the agreement revenue may be recognised over
                                                        time when the entity constructs customised goods or complex assets for the
• Is the entity selling a customised good?              customer depending on whether the entity has payment rights over the period
• What are the payment terms?                         • Not all the indicators for transfer of control need to be present for an entity to
  Does it create an enforceable right                   conclude that it has transferred control to its customer. Similarly the standard
  forthe entity?                                        does not provide any guidance on whether more weight is to be placed on
• Are there clauses in the agreement that               one indicator over the others. Significant judgment is required to determine if
  are in the nature of forward sale                     control has been transferred
  or purchase, put and/or call options?               • For any licensing arrangements an entity needs to exercise significant
• When does the customer gain control                   judgement when determining whether the licence is a separate performance
  over the good/service?                                obligation within the contract and the appropriate timing of revenue recognition
• Is usage of the percentage of                         from such licences. This is an area that has undergone significant debate by the
  completion method still appropriate                   IASB and is still subject to discussion at the Joint Transition Resource Group. The
  to measure revenue?                                   IASB is expected to issue additional guidance on license arrangements

• Does the entity receive any                         • The timing of revenue recognition will be subject to significant judgement,
  non-refundable upfront fees?                          especially when there are repurchase clauses (puts, calls and/or forwards)
  What rights does the customer have                    within an agreement or when the entity receives non-refundable upfront fees.
  as a result of the upfront fee?
• Does the entity have licensing

           AASB 15 reference:
           AASB 15.31–38; B2–B19; B44–B51; B57–B86

Illustrative Examples:                 Example 17 –Assessing whether a       Example 54 – Right to use intellectual   Example 61 – Access to intellectual
                                       performance obligation is satisfied   property                                 property – Brand
Example 13 – Customer                  at a point in time or over time       Example 55 – Licence of intellectual     Example 62 – Repurchase
simultaneously receives and            – Construction                        property                                 agreements
consumes the benefits – Services       Example 18 – Measuring progress       Example 57 – Franchise rights            Example 63 – Bill-and-hold
Example 14 –Assessing alternative      when making goods or services         Example 58 – Access to intellectual      arrangement
use and right to payment – Services    available – Health Clubs              property – Images
Example 15 –Asset has no alternative   Example 19 – Uninstalled materials    Example 59 – Right to use intellectual   Basis for Conclusions:
use to the entity – Construction       – Construction                        property – Music                         BC117–BC157;BC396–BC431
Example 16 –Enforceable right to       Example 53 – Non-refundable upfront   Example 60 – Access to intellectual
payment for performance completed      fees – Services                       property – Movies
to date – Construction

Contract costs

The new standard introduces guidance on              What costs can be capitalised?
how to account for costs associated with             When assessing whether contract costs are
a customer contract when they do not                 eligible for capitalisation it is important to
fall within the scope of another standard,           distinguish between the costs of obtaining
e.g. AASB 102 Inventories or AASB 116                a contract and the costs of fulfilling it. Both
Property Plant and Equipment. The                    of these categories of cost may be eligible
guidance addresses costs of obtaining a              for capitalisation in accordance with the
contract, costs of fulfilling a contract and the     standard. However, the rules for each
amortisation and impairment of contract              category are different and care must be
costs capitalised.                                   taken to apply the correct guidance.

Incremental costs of obtaining a contract [AASB 15.91-94]:

  Incremental costs relate to                      No
  winning the contract, e.g. sales
                                                                (Unless explicitly chargeable to the
               Yes                                              customer)

  Entity expects to recover                        No
  these costs?

  Amortisation period of the asset                              Accounting policy choice: Expense or
  is less than 1 year?                                          recognise an asset and amortise on a
                                                                systematic basis.
                                                                Recognise an asset and amortise on a
                                                                systematic basis.

Costs to fulfil a contract [AASB 15.95-98]:

  Are the costs incurred                    Are all of the following conditions met:
  to fulfil the contract           No       • Costs relate directly to the contract?
  in the scope of other
                                            • Costs generate or enhance the resource?
  accounting standards?
                                            • Costs are recoverable?

         Yes                                             Yes                                  No

  Account for in                             Recognise an asset                        Expense costs as they
  accordance with the                        and amortise on a                         are incurred.
  specific accounting                        systematic basis.

Costs directly attributable to a contract      Contract duration [AASB 15.11–12]:
include [AASB 15.97]:                          Contract duration is an important
• Direct labour                                assessment for the purpose of determining
• Direct materials                             the appropriate amortisation of costs,
                                               as well as deferred revenue. Some of
• Allocations of costs directly related to
                                               the factors to consider in assessing the
  the contract
                                               duration of a contract are:
• Costs explicitly chargeable to the
  customer under the contract                  • Whether there are ‘legally enforceable
                                                 rights and obligations’
• Other costs directly incurred as result of
  entering into the contract, e.g. payments    • Whether there is a reference to a fixed
  to subcontractors.                             period in the contract
                                               • Clauses in the contract or past practice
Costs required to be expensed when               relating to termination and auto-renewal
incurred [AASB 15.98]:                           of contracts.
• General and administrative costs, unless     Impairment of capitalised contract costs
   explicitly chargeable under the contract    [AASB 15.101–104]:
• Costs that relate to satisfied               Costs that are recognised as assets are
  performance obligations                      periodically tested for impairment. The
• Costs of wasted materials, labour or         recoverability of capitalised contract costs
  other contract costs.                        should be assessed on a contract-by-
                                               contract basis by comparing the remaining
Amortisation of capitalised contract
                                               consideration to the unamortised contract
costs [AASB 15.99–100]:
                                               costs. Prior to recognising an impairment
Costs that are recognised as assets are
                                               loss on the capitalised contract costs, the
amortised over the period that the related
                                               entity should first evaluate recovery of the
goods/services are to be transferred to
                                               carrying value of other assets related to
the customer. An entity should update
                                               the contract according to the guidance in
the amortisation if there is a significant
                                               other accounting standards, such as AASB
change in the expected timing of transfer
                                               102 Inventories and AASB 136 Impairment
of the remaining goods/services under the
                                               of Assets. After recording any asset
contract which will be accounted for as
                                               impairment from applying other standards,
a change in estimate in accordance with
                                               an entity should apply the impairment
AASB 108 Accounting Policies, Changes in
                                               guidance in this Standard to the contract
Accounting Estimates and Errors.
                                               cost asset.

• The standard prohibits capitalisation of costs that are to be incurred by the
           To consider:
                                                   entity regardless of whether a contract is won, e.g. legal, travel and other
                                                   costs associated with bidding, proposal and marketing. These costs should be
• Are the costs incurred directly                  expensed. Costs which are incurred only due to the entity winning a contract,
  attributable to the contract?                    e.g. sales commission paid to employees, will be eligible for capitalisation if they
• Does the entity incur design costs prior         are recoverable
  to obtaining a contract?
                                                 • Contract costs expensed cannot be capitalised later
• What is the duration of the contract?
• Are there options to extend the contract       • For the purpose of assessing the recoverability of contract costs, an entity is
  beyond its initial terms?                        required to determine the remaining consideration under the contract. In order
• Can the entity recover set-up or                 to do so, an entity should use the transaction price determined in Step 3 without
  mobilisation costs incurred that are             applying the constraint on variable consideration. However, an entity is required
  not considered separate performance              to adjust the remaining consideration for the customer’s credit risk (expected
  obligations? Are these costs charged to          provision for doubtful debts)
  the customer separately?
                                                 • The standard contemplates that an entity can capitalise costs that are directly
• How does the entity assess whether a
  contract is ‘anticipated’ for the purpose        attributable to fulfilling an ‘anticipated’ contract.
  of capitalising directly attributable costs?

           AASB 15 reference:
           AASB 15: 91–104

Illustrative Examples:
Example 36 – Incremental costs of
              obtaining a contract
Example 37 – Costs that give rise to
              an asset
Basis for Conclusions: BC297–BC311


The presentation requirements of the           For example:
new standard include disclosure intended       • Effective date and expected date of
to enable users to understand the amount,        initial application
timing and judgements related to revenue
                                               • Expected impacts
recognition and the related cash flows.
The requirements include, where                • Nature of changes in accounting policy
applicable, qualitative and quantitative         as a result of applying the new standard.
information that will extend disclosures
beyond current practice.                       Significant level of enhanced and
                                               detailed disclosure:
How will the financial                         The new disclosure requirements
statements change?                             encompass both quantitative and
From now until effective date                  qualitative disclosures [AASB 15.110-129].
of application:
Entities should consider what                  Objective:
disclosures are required to comply             Enable users to understand nature, amount, timing and
with AASB 108.30–31.
                                               uncertainty of revenue and cash-flow

 Contracts with customers                       Assets from contract costs                   Significant judgements applied

 • Disaggregation of revenue                    • Judgements used to ascertain costs to      • Judgements applied or changes in
   into categories that show                      obtain or fulfill a contract                 judgement regarding the:
   how economic factors affect                  • Method(s) used for amortisation              – Timing of satisfaction of
   the nature, amount, timing                                                                    performance obligations
                                                • Closing balance by main category (set-up
   and uncertainty of revenue and
                                                  costs, pre-contract costs, costs to          – Transaction price allocated to
   cash flows, reconciled to the
                                                  obtain contracts)                              performance obligations
   Segment Note
                                                • Amount of amortisation during              • Performance obligations satisfied
 • Reconciliation of contract balances:
                                                  the period                                   over time – methods used to measure
     – Opening and closing balances and                                                        progress and the reasoning
                                                • Amount of impairment loss during
       revenue recognised during the period
                                                  the period.                                • Methods, inputs and assumptions for
       from changes in
                                                                                               determining the transaction price;
       contract balances
                                                                                               constraining variable consideration;
     – Qualitative and quantitative                                                            allocation of the transaction price;
       information about the significant                                                       obligations for refunds and returns
       changes in contract balances
                                                                                             • Performance obligations satisfied at
 • Descriptive information about an entity’s                                                   a point in time – evaluation of when a
   performance obligations                                                                     customer obtains control
 • Information about the transaction price                                                     of goods/services.
   allocated to remaining performance
   obligations and when revenue will be
 • Impairment losses on receivables.

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