Revenue – ifrs 15 handbook

2.3 
Series of distinct goods or services
IFRS 15.22(b)
A contract may contain promises to deliver a series of distinct goods or services 
that are substantially the same. At contract inception, an entity assesses the goods 
or services promised in the contract and determines whether the series of goods 
or services is a single performance obligation. This is the case when they meet the 
following criteria.
IFRS 15.23
=
+
The goods or services are substantially the same
Each distinct good or service in the series is a performance
obligation satisfied over time
(see Section 5.2)
+
The same method would be used to measure progress towards
satisfaction of each distinct good or service in the series
(see Section 5.3)
A single performance obligation

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40 | Revenue – IFRS 15 handbook
Example 15 – Series of distinct goods or services treated as a 
single performance obligation
Contract Manufacturer X agrees to produce 1,000 customised widgets for use 
by Customer C in its products. X concludes that the widgets will transfer to C 
over time because: 
– they have no alternative use to X; and 
– C is contractually obliged to pay X for any finished or in-progress widgets, 
including a reasonable margin, if C terminates the contract for convenience. 
X already has the process in place to produce the widgets and is given the 
design by C, such that X does not expect to incur any significant learning curve 
or design and development costs. X uses a method of measuring progress 
towards complete satisfaction of its manufacturing contracts that takes into 
account work in progress and finished goods controlled by C.
X concludes that each of the 1,000 widgets is distinct, because: 
– C can use each widget on its own; and 
– each widget is separately identifiable from the others because one does not 
significantly affect, modify or customise another.
Despite the fact that each widget is distinct, X concludes that the 1,000 units 
are a single performance obligation because: 
– each widget will transfer to C over time; and 
– X uses the same method to measure progress towards complete satisfaction 
of the obligation to transfer each widget to C. 
Consequently, X recognises the transaction price for all 1,000 widgets over time 
using an appropriate measure of progress. This outcome may be different from 
the outcome of allocating a fixed amount to each widget if each one were a 
performance obligation.