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IFRS 15: Revenue - Coggle Diagram

- - - - This should be discussed.
- - - - Approval may be in the form of a signature or implied by payment and receipt
- - - - Explicitly
        
        customary business practices
      - Or Implicit
- - - - Over Time
      - Or at a Point in Time.
  - - - This means that the work being performed is specific to the customer's needs and cannot be repurposed for another customer or use. Therefore, until the work is completed, and payment is received, the entity cannot recognize revenue.*
  - - - Output Methods
        
        Output methods are based on the output produced to date. For example, if the performance obligation is to build a building with ten floors, the company can measure their progress towards completion by looking at how many floors they have built so far compared to the total number of floors in the building.
      - Input Methods
        
        Input methods are based on the inputs used to date. For example, if the performance obligation is to build a building with ten floors, the company can measure their progress towards completion by looking at how much they have spent on the project so far compared to the total expected cost of the project.
  - - - Legal Title
      - Physical Possession
      - Present Right to Payment
      - Significant Risks and Rewards of Ownership
      - Acceptance of the Asset
- - - - Performance Bonuses
      - Penalties
      - Refunds
      - Contingent Payments
      - Rebates
      - Discounts
    - - expected value method
        
        based on the probability-weighted average of all possible outcomes
      - most likely amount method
        
        based on the single most likely amount in a range of possible outcomes
    - - The estimate included in revenue should not result in a significant reversal at a future date due to re-estimation.
      - This limitation attempts to prevent the significant reversal of revenue and ensure that entities are not tempted to overstate revenue.
  - - - transactions where the buyer agrees to pay for the goods or services at a later date, rather than at the time of purchase.
    - - Time value of money needs to be considered in transactions where cash is received or goods are delivered at a later date.
- - - - Incremental costs can be capitalized as an asset and amortized over time
        
        Legal Costs
        
        Marketing Costs
        
        Sales Commission
    - - If falls under another standard, account accordingly
      - If not falling under another standard, but directly related to the contract and expected to be recovered, can be capitalized as an asset