IFRS 15 stipulates that revenue must be recognized when the corresponding performance obligation is satisfied. The decisive factor is the transfer of control over an asset. A distinction is made between two types of performance obligations:
In the first case, it is assumed that the service will be rendered at the second of the final transfer of control over the asset. In the second case, IFRS 15 provides for successive renue recognition.
As a rule, the so-called PoC method (percentage-of-completion method) is applied over the performance period. In some cases, the alternative zero-profit method is also used.
Important to know: According to IFRS 15, revenue may only be recognized if it is probable that the customer will meet its payment obligations when they fall due.
In crisis situations such as the Corona pandemic, uncertainties can arise in this respect within a short period of time. In this case, companies must also check whether certain sales may still be recognized in the balance sheet for contracts that are already in progress.