Revenue – ifrs 15 handbook

Determining the nature of the entity’s promise to the customer is 
the first step in applying the series guidance
Determining the nature of the entity’s promise is the first step in determining 
whether the series guidance applies. For example, if the nature of the promise 
is the delivery of a specified quantity of a good or service, then the evaluation 
considers whether each good or service is distinct and substantially the same.
Conversely, if the nature of the entity’s promise is to stand ready or to provide 
a single service for a period of time (i.e. there is not a specified quantity to 
be delivered), then the evaluation will probably focus on whether each time 
increment, rather than the underlying activities, is distinct and substantially 
the same.
Identifying distinct goods or services as a series may affect the 
allocation of variable consideration
Even if per-unit pricing is fixed, if the quantity related to a series is not specified 
then it results in variable consideration (see 
Chapter 3
). However, an entity 
is not required to allocate variable consideration across the distinct goods or 
services included in a series on a stand-alone selling price basis. Instead, it 
follows the general guidance in the standard on allocating variable consideration 
entirely to a performance obligation or a distinct good or service that forms part 
of a performance obligation (see 
Chapter 4
). For example, this may be relevant if 
the goods or services in the series and any other performance obligations in the 
contract are priced at market rates.
Not necessary for goods or services to be provided consecutively 
To apply the series guidance, it is not necessary for the goods to be delivered 
or services performed consecutively over the contract period. There may be 
a gap or an overlap in delivery or performance and this would not affect the 
assessment of whether the series guidance applies. 
Although the Board specifically contemplated a consecutively delivered 
contract (e.g. repetitive service arrangement), it did not make this distinction a 
criterion for applying the series guidance.

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2 Step 2 – Identify the performance obligations in the contract | 43
2.3 Series of distinct goods or services
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