Revenue – ifrs 15 handbook

Example 9 – Time-based measure of progress: Technical support 
services
Company S enters into a contract to license software to Customer C and 
provide technical support for the three-year licence period. The terms of the 
support agreement specify that S’s helpdesk and web support operators are 
available every day other than Sundays. S concludes that the software licence 
and the technical support services are distinct from each other and are separate 
performance obligations. 
The distinct software licence is satisfied at a point in time (see 
Chapter 9
). S 
concludes that the technical support services are satisfied over time. This is 
because C consumes and receives benefit from having continuous access to 
S’s support resources throughout the three-year period. That is, the technical 
support is a ‘stand-ready obligation’. S determines that a time-elapsed measure 
of progress is appropriate. 
However, if S’s contractual obligation in relation to technical support was instead 
to provide a specified number of support calls, then it would generally recognise 
revenue as C makes use of the specified calls.
Example 10 – Time-based measure of progress: Unspecified 
updates
Company U licenses software to Customer C and promises to provide 
unspecified updates for the full three-year licence period. 
U concludes that the software licence and the unspecified updates rights are 
distinct from each other and are separate performance obligations. The distinct 
software licence is satisfied at a point in time (see 
Chapter 9
). 
U has a history of providing unspecified items to customers on a regular basis. 
However, the quantity and the mix of items that a customer will receive (e.g. 
bug fixes and updates) and the timing of releases within a given period vary. 
Therefore, U concludes that: 
– the nature of its performance obligation to provide unspecified updates, 
upgrades and enhancements is a ‘stand-ready obligation’; and
– it expects to expend efforts to develop and transfer unspecified items to 
the customer on a generally even basis throughout the three-year term. U 
determines that a time-based measure of progress is appropriate, resulting 
in straight-line revenue recognition for the performance obligation.

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134 | Revenue – IFRS 15 handbook