Revenue – ifrs 15 handbook

Type of 
contract
Description
Observations
IFRS 15.IE49–IE58D
Example 11A and 11B – Technology
Contract 
to transfer 
a software 
licence, 
installation 
services, 
unspecified 
software 
updates and 
technical 
support
Two cases are provided 
to illustrate differences in 
identifying performance 
obligations depending 
on whether the software 
will be significantly 
customised or modified 
as part of professional 
services also promised 
to the customer in the 
contract.
Installation services involving 
the customisation or 
modification of a software 
licence may result in a 
conclusion that the licence is 
not distinct from the services.
Determining whether 
professional services involve 
significant customisation or 
modification of the software 
may require significant 
judgement. 
IFRS 15.IE278–IE280
Example 55 – Technology
Contract to 
license IP 
related to the 
design and 
production 
processes 
for a good, 
including 
updates to 
that IP
The customer is entitled 
to all updates for new 
designs or production 
processes.
The updates are essential 
to the customer’s ability 
to derive benefit from the 
licence.
The example concludes 
that the licence and the 
updates are inputs into a 
combined item for which 
the customer contracted 
and that the promises to 
grant the licence and the 
updates are not distinct. 
The entity’s overall 
promise to the customer 
is to provide ongoing 
access to the entity’s IP.
There may be diversity in views 
about the kinds of technology 
to which the fact pattern, 
analysis and outcome may 
apply in practice.
An entity considers the nature 
of the promise in these fact 
patterns. For example, this 
promise is a service rather than 
a licence of IP with upgrades.

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212 | Revenue – IFRS 15 handbook