Revenue – ifrs 15 handbook

Comparatives
Current year
Total
2016
2017
2018
Revenue
-
100,000
-
100,000
Under the new standard, E determines that control is transferred over time and 
revenue is therefore recognised over time using the cost-to-cost method.
Comparatives
Current year
Total
2016
2017
2018
Revenue
-
100,000
-
100,000
The contract begins and ends in the same annual period – i.e. 2017 – so revenue 
amounts for 2018 are not impacted but practical expedient 1 is relevant. 
– If Company E elects this practical expedient, then it does not have to analyse 
the contract under the new standard. 
– In contrast, if E does not elect the practical expedient then it restates its 
interim results for the comparative period (i.e. 2017) to reflect the accounting 
required under the new standard (i.e. over-time revenue recognition).
Relief provided by practical expedient 1
This practical expedient might seem to be of limited benefit, because any 
adjustments are made in the same period as the contract is started and 
completed. Therefore, revenue for the annual period is not affected. However, it 
can provide relief for some types of transactions – e.g. when:
– additional performance obligations are identified in a contract under the new 
standard, as compared with previous requirements – e.g. some car sales in 
which the manufacturer provides a free service to the end purchaser of a car 
and treats it as a sales incentive under previous requirements; 
– a contract that was treated as a point-in-time transaction under previous 
requirements is treated as an over-time obligation under the new standard – 
e.g. some construction contracts for apartment sales; and
– a contract begins and ends in the same annual reporting period, but spans 
one or more interim periods (although in these situations the entity will also 
need to consider the importance of comparability from one interim period 
to another).

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13 Effective date and transition | 333
13.2 Retrospective method
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