Revenue – ifrs 15 handbook

Example 5 – Current vs non-current classification: Contract assets: 
Real estate developer
IAS 1.61
Developer D enters into a contract with Customer P to construct a building for 
fixed consideration of 100 million. The construction takes 30 months to complete. 
The milestone payments and actual construction progress are as follows (in 
millions).
Month
Milestone 
payments
Actual 
construction 
progress
Contract 
assets/ 
(liability)
0 (at inception)
5
0%
(5)
12
10
30%
15
24
10
80%
55
30
65
100%
10
42
10
100%
-
Of the contract assets of 15 million recognised at the end of the first 12 months, 
10 million will be collected within 12 months and the remaining 5 million will be 
collected after 12 months. 
D considers the duration of its projects in determining its operating cycle. If 
all projects are performed within a similar timeframe, then this may indicate 
that D’s operating cycle is identifiable and approximates the average duration 
of its projects – e.g. 30 months. In this case, the entire amount of the contract 
asset of 15 is presented as a current item. The amounts that are expected to 
be recovered after 12 months are separately disclosed in accordance with the 
requirements in the presentation standard.
The analysis is similar to Example 4 in this chapter if D’s projects are of different 
duration and it defaults to the 12-month operating cycle.

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11 Presentation | 307
11.1 Statement of financial position
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Example 6 – Current vs non-current classification: Contract assets: