Revenue – ifrs 15 handbook

Collectability threshold may be assessed using information 
derived at the portfolio level
IFRS 15.4
In some situations, an entity may use a portfolio of historical data to estimate 
the amounts that it expects to collect. This type of analysis may be appropriate 
when an entity has a high volume of homogeneous transactions. These 
estimates are then used as an input into the overall assessment of collectability 
for a specific contract.
For example, if on average a vendor collects 60 percent of amounts billed for 
a homogeneous class of customer transactions and does not intend to offer 
a price concession, then this may be an indicator that collection of the full 
contract amount for a contract with a customer within that class is not probable. 
Therefore, the criterion requiring collection of the consideration under the 
contract to be probable may not be met.
Conversely, if on average a vendor collects 90 percent of amounts billed for 
a homogeneous class of contracts with customers, then this may indicate 
that collection of the full contract amount for a contract with a customer 
within that class is probable. Therefore, the criterion requiring collection of 
the consideration under the contract to be probable may be met. However, 
if the average collections were 90 percent because the vendor generally 
collected only 90 percent from each individual contract, then this may indicate 
that the vendor has granted a 10 percent price concession to its customer. 
For a discussion of the differentiation between a collectability issue and a 
price concession, see the previous box.

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8 | Revenue – IFRS 15 handbook
Collectability is reassessed only when there is a significant