Revenue – ifrs 15 handbook

1.2
Contract term
Contract term affects many parts of the standard ........................................................................................................... 16
Consideration payable on termination can affect assessment of contract term ............................................................... 16
Compensation is broader than only termination payments.............................................................................................. 16
Ability of either party to cancel the contract at discrete points in time may limit the contract term ................................. 16
Evergreen contracts ........................................................................................................................................................ 17
Only the customer has a right to terminate the contract ................................................................................................. 17
1.3 
Consideration received before a contract exists
Revenue recognition may be deferred for a significant period ......................................................................................... 18
A receivable is generally not recognised when the collectability threshold is not met ..................................................... 19
1.4 
Combination of contracts
Evaluating ‘at or near the same time’ when determining whether contracts should be combined .................................. 21
Definition of related parties acquires new significance ................................................................................................... 21
No exception for contracts entered into with different divisions of the same entity ........................................................ 22
Additional complexities for sales through distribution channels ...................................................................................... 22