Revenue – ifrs 15 handbook

12.1.2 
Contract balances
IFRS 15.116–118
An entity is required to disclose all of the following:
– the opening and closing balances of contract assets, contract liabilities and 
receivables from contracts with customers (if they are not otherwise separately 
presented or disclosed);
– the amount of revenue recognised in the current period that was included in the 
opening contract liability balance;
– the amount of revenue recognised in the current period from performance 
obligations satisfied (or partially satisfied) in previous periods: e.g. changes in 
transaction price;
– an explanation of how the entity’s contracts and typical payment terms will affect 
its contract asset and contract liability balances; and

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12 Disclosure | 321
12.1 Annual disclosure
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– an explanation of the significant changes in the balances of contract assets 
and contract liabilities, which should include both qualitative and quantitative 
information, such as:
- changes arising from business combinations;
- cumulative catch-up adjustments to revenue (and to the corresponding 
contract balance) arising from a change in the measure of progress, a change 
in the estimate of the transaction price or a contract modification;
- impairment of a contract asset; or
- a change in the timeframe for a right to consideration becoming unconditional 
(reclassified to a receivable) or for a performance obligation to be satisfied (the 
recognition of revenue arising from a contract liability).
Changes in the transaction price may need to be disclosed
IFRS 15.116, 118(b)
To disclose the amount of revenue recognised in the current period that relates 
to performance obligations that were satisfied (or partially satisfied) in a prior 
period, as well as cumulative catch-up adjustments to revenue that affect the 
corresponding contract asset or contract liability, an entity may need to track 
separately the effects of changes in the transaction price. 
For example, Manufacturer M enters into a contract containing a single 
performance obligation that is satisfied over time. The contract price includes 
5,000 fixed consideration plus up to 1,000 variable consideration based on 
manufacturing targets. 
At the end of Year 1, the contract is 35% complete and M estimates that total 
variable consideration will be 200. At the end of Year 2, the contract is 90% 
complete and M estimates that total variable consideration will be 1,000.
M therefore recognises revenue as follows.