Revenue – ifrs 15 handbook

Payment 
schedule
– A payment schedule does not necessarily indicate 
whether an entity has an enforceable right to payment for 
performance to date
Contractual 
terms
– If a customer acts to terminate a contract without having 
a contractual right at that time to do so, then the contract 
terms may entitle the entity to continue to transfer the 
promised goods or services and require the customer to 
pay the corresponding consideration promised
IFRS 15.B11
Legislation or 
legal precedent
– Even if a right is not specified in the contract, jurisdictional 
matters such as legislation, administrative practice or legal 
precedent may confer a right to payment to the entity
– By contrast, legal precedent may indicate that rights to 
payment in similar contracts have no binding legal effect 
or that an entity’s customary business practice not to 
enforce a right to payment may result in that right being 
unenforceable in that jurisdiction
IU 03-18
Payment in 
scope of the 
analysis
– Only payments under the existing contract with the 
customer are relevant for the analysis 
– Amounts received or to be received from a third party 
if the asset is resold are not payments for performance 
under the existing contract

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5 Step 5 – Recognise revenue when or as the entity satisfies a performance obligation | 123
5.2 Performance obligations satisfied over time
| 
Example 4 – Applying the over-time criteria: Consulting contract
IFRS 15.IE69–IE72
Consulting Firm B enters into a contract to provide a professional opinion to 
Customer C based on C’s specific facts and circumstances. If C terminates the 
consulting contract for reasons other than B’s failure to perform as promised, 
then the contract requires C to compensate B for its costs incurred plus a 15% 
margin. The 15% margin is approximately the profit margin that B earns from 
similar contracts.
B assesses the contract against the over-time criteria and reaches the following 
conclusions.