Revenue – ifrs 15 handbook

Revenue recognition may be deferred for a significant period
If an entity cannot conclude that a legally enforceable contract exists, then 
it may be difficult to evaluate when all or substantially all of the promised 
consideration has been received and is non-refundable. In some cases, an 
entity may have a deposit liability recognised for a significant period of time 
before it can conclude that a contract exists in the model or that the criteria for 
recognising the consideration as revenue are met.

---

© 2019 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
1 Step 1 – Identify the contract with a customer | 19
1.4 Combination of contracts
| 
A receivable is generally not recognised when the collectability 
threshold is not met
Generally, when an entity concludes that a contract does not exist because the 
collectability threshold is not met, the entity does not record a receivable for 
consideration that it has not yet received, for the goods or services transferred 
to the customer. 
1.4 
Combination of contracts
IFRS 15.17
The following flowchart outlines the criteria in the standard for determining when an 
entity combines two or more contracts and accounts for them as a single contract.
Are one or more of the following criteria met?
Contracts were negotiated as a single
commercial package
Consideration in one contract depends on
the other contract
Goods or services (or some of the goods
or services) are a single performance
obligation (see Chapter 3)
Yes
Yes
Account for contracts as a single contract
Account
as
for
separate
contracts
No
No