AASB 15 Revenue from Contracts with Customers 9-16,Aus9.1: Account for a contract only when the five criteria hold, keep testing contracts that fail them, and hold consideration received as a liability until the criteria are met or the arrangement ends

What does 9-16,Aus9.1 require?

A customer contract enters the model only when the parties have approved it and are committed, each party's rights over the goods or services can be identified, the payment terms can be identified, the contract has commercial substance, and collecting the consideration the entity will be entitled to is probable, judged on whether the customer can and intends to pay (price concessions can make that amount less than the stated price). Enforceability is a legal question and contracts may be written, oral or implied by customary practice; the model runs for the period in which enforceable rights and obligations exist, and no contract exists while each party can walk away from a wholly unperformed arrangement without compensation. Once met, the criteria are not reassessed unless facts change significantly; while unmet, the contract is reassessed and any consideration received is a liability measured at the amount received, released to revenue only when nothing remains to be transferred and substantially all consideration is non-refundable, or the contract is terminated and the consideration is non-refundable. For not-for-profit entities, an arrangement that fails the criteria because it is unenforceable or insufficiently specific falls to AASB 1058.