http://www.iasplus.com/en/standards/ifrs/ifrs15
IFRS-15 has 5 pillars. 1. Identify contract 2. Identify Performance Obligations 3. Identify Transaction price 4. Allocate transaction price 5. Recognize revenue on the basis of transaction price Explanation: 1. We see the legal form of contract. 2. There can be more than one performance obligations in a contract. For Example: An entity selling goods with repairs services. 3. Identify the transaction price at which goods or services are being sold or delivered. 4. This point eliminates the concept of IAS-11 Construction Contracts which says to recognize revenue over the life of the contract. IFRS-15 says: . 1. Recognize the revenue over the life of the contract only when construction services are being delivered to a single owner i.e: Building a house for an owner. . 2. Recognize revenue only when the property under construction is transferred to their owners i.e: Building number of flats for number of people, recognize revenue when the flats have been completely built and in actual transferred to the buyers. 5. After all the above 4 conditions have been met finally recognize revenue on the basis of transaction price.
