When do you officially “count” a sale? 🧾💰

In this episode 🎙️, we break down the powerhouse standard: IFRS 15.

Revenue is no longer about issuing an invoice or receiving cash. It’s about control — when it transfers, how it transfers, and what exactly was promised.

From retail sales 🛍️ to multi-year construction contracts 🏗️, IFRS 15 applies the same five-step logic. Master the framework, and the complexity becomes structured instead of chaotic.

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What we cover in this episode:

• The Five-Step Model 🧠

1️⃣ Identify the contract

2️⃣ Identify performance obligations

3️⃣ Determine the transaction price

4️⃣ Allocate the price

5️⃣ Recognize revenue

Every question lives inside these five steps.

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• Bundled Goods & Services 📦

One contract. Multiple promises.

How do you split one price across software 💻, maintenance 🔧, and training 📘?

Relative standalone selling prices — not guesswork.

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• Variable Consideration 🎯

Bonuses, penalties, right of return.

Measured using:

✔️ Expected Value

✔️ Most Likely Amount

And constrained to avoid over-recognition.

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• The Time Value of Money ⏳

If payment timing provides a significant financing benefit, part of your “revenue” is actually interest income or expense.

Not all sales are pure sales.

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• Contract Costs 📑

Incremental costs of obtaining a contract (like sales commissions) may be capitalized — if recoverable.

General admin costs? Expense immediately.

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• Point in Time vs. Over Time ⏰

Does control transfer at once?

Or progressively over time?

Construction, customized assets, enforceable right to payment — these indicators matter.

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🔥 A Pro-Tip for your SOCPA Prep

Examiners love Step 2: Identifying Performance Obligations 🚨.

Use the “Distinct” test:

A good or service is distinct if:

1️⃣ The customer can benefit from it on its own.

2️⃣ It is separately identifiable within the contract.

Miss this, and your entire revenue timing collapses.