Under IFRS 15, when should an entity recognise revenue?
Answer and explanation
Correct answer: B. When or as it satisfies a performance obligation by transferring control of the goods or services to the customer
- Step 1: IFRS 15 recognises revenue on transfer of control.
- Step 2: That happens when a performance obligation is satisfied, at a point in time or over time.
Answer
When or as it satisfies a performance obligation by transferring control of the goods or services to the customer.
Why not the others: Cash receipt may come before or after delivery, so it does not set the timing. A signed contract creates obligations but does not itself transfer goods or services. An invoice is only a request for payment and does not show control has passed.
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