AASB 15 Revenue from Contracts with Customers
The Australian adoption of IFRS 15: the five-step revenue model (identify the contract and its performance obligations, determine and allocate the transaction price, recognise revenue as control passes), the rules for variable consideration and its constraint, financing components, contract costs, contract assets and liabilities and the disclosure package, the application guidance for warranties, principal and agent, options, licensing, repurchase, consignment and bill-and-hold arrangements, and the Australian not-for-profit and public sector licensor guidance.
AASB 15 Revenue from Contracts with Customers is a compliance framework from Australia (Commonwealth) with 9 domains and 41 controls. The largest domains are Application guidance on specific arrangements (paragraphs B28 to B86) – AASB 15 Revenue from Contracts with Customers (7 controls), Determining the transaction price (paragraphs 46 to 72, B20 to B27) – AASB 15 Revenue from Contracts with Customers (7 controls), Not-for-profit implementation guidance (Appendices F and G) – AASB 15 Revenue from Contracts with Customers (5 controls). Every control below carries what it requires and what an assessor expects to see.
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Framework Domains (9)
Allocating the transaction price and later changes to it (paragraphs 73 to 90) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::73-80 | Split the transaction price across performance obligations in proportion to stand-alone selling prices determined at inception, estimating unobservable prices with observable inputs and consistent methods |
| aasb-15-revenue-from-contracts-with-customers::81-86 | Allocate bundle discounts proportionately unless observable evidence ties the discount to specific obligations, and allocate variable amounts to the obligation or distinct item they specifically relate to when that meets the allocation objective |
| aasb-15-revenue-from-contracts-with-customers::87-90 | Allocate later transaction price changes on the inception basis, recognising amounts for satisfied obligations immediately, and apply the modification rules for changes that arise from a modification |
Application guidance on specific arrangements (paragraphs B28 to B86) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::B28-B33 | Separate service-type warranties as performance obligations and account for assurance-type warranties as provisions, splitting a combined warranty reasonably |
| aasb-15-revenue-from-contracts-with-customers::B34-B38 | Determine for each specified good or service whether you are principal (controlling it before transfer, recognising gross) or agent (arranging it, recognising the net fee), using the control indicators |
| aasb-15-revenue-from-contracts-with-customers::B39-B47 | Treat customer options that convey a material right as separate performance obligations, and recognise breakage on unexercised rights in proportion to exercise where expected, otherwise when exercise becomes remote |
| aasb-15-revenue-from-contracts-with-customers::B48-B51 | Account for non-refundable upfront fees according to whether they relate to a transferred good or service, deferring fees for set-up activities over the expected service period including anticipated renewals |
| aasb-15-revenue-from-contracts-with-customers::B52-B63B | For licences of intellectual property, decide whether the promise is a right to access (over time) or a right to use (point in time), and recognise sales- or usage-based royalties only when the later of sale or satisfaction occurs |
| aasb-15-revenue-from-contracts-with-customers::B64-B76 | Account for repurchase agreements by their form: forward or call as a lease or financing, and put options by repurchase price and the customer's economic incentive |
| aasb-15-revenue-from-contracts-with-customers::B77-B86 | Apply the control analysis to consignment, bill-and-hold and customer acceptance arrangements: no revenue for consigned goods, bill-and-hold only when all four criteria hold, and acceptance deferred only where it is substantive |
Contract costs: obtaining, fulfilling, amortisation and impairment (paragraphs 91 to 104) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::91-94 | Capitalise incremental contract acquisition costs when recovery is expected, expense costs that would be incurred regardless, with the one-year expedient |
| aasb-15-revenue-from-contracts-with-customers::95-98 | Capitalise fulfilment costs outside other Standards only when they relate directly to a contract, generate resources for future performance and are recoverable; expense general, wasted and past-performance costs |
| aasb-15-revenue-from-contracts-with-customers::99-104 | Amortise contract cost assets in step with how the related goods or services transfer, update the pattern for significant timing changes, and test them for impairment after other contract assets, with reversals permitted |
Determining the transaction price (paragraphs 46 to 72, B20 to B27) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::46-49 | Recognise the transaction price allocated to each satisfied obligation, determined from the contract terms and customary practice, excluding third-party collections and constrained variable amounts |
| aasb-15-revenue-from-contracts-with-customers::50-54 | Estimate variable consideration with the expected value or the most likely amount, choosing the better predictor, applying it consistently, and using all reasonably available information |
| aasb-15-revenue-from-contracts-with-customers::55,B20-B27 | Recognise a refund liability for consideration you expect to return, and account for sales with a right of return through revenue net of expected returns, a refund liability and a recovery asset |
| aasb-15-revenue-from-contracts-with-customers::56-59 | Include variable consideration only to the extent a significant revenue reversal is highly improbable, reassess the estimate and the constraint every period, and defer sales- or usage-based royalties on intellectual property to the royalty guidance |
| aasb-15-revenue-from-contracts-with-customers::60-65 | Adjust for a significant financing component when payment timing gives either party a significant financing benefit, using the inception discount rate, with the one-year expedient and separate presentation of interest |
| aasb-15-revenue-from-contracts-with-customers::66-69 | Measure non-cash consideration at fair value, or by reference to stand-alone selling prices when fair value cannot be reasonably estimated, and treat customer-contributed goods or services the entity controls as consideration |
| aasb-15-revenue-from-contracts-with-customers::70-72 | Consideration payable to a customer: net it against the transaction price unless it buys a distinct good or service at fair value, and recognise the reduction at the later of the related revenue or the payment promise |
Identifying the contract, combinations, modifications and performance obligations (paragraphs 9 to 30) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::17-21 | Combine contracts entered together with one customer when they form one deal, and account for a modification as a separate contract, a termination plus new contract, or a cumulative catch-up as the facts dictate |
| aasb-15-revenue-from-contracts-with-customers::22-30,Aus26.1 | Identify every performance obligation at inception: each distinct good or service, or a series of substantially similar distinct items with the same transfer pattern, including implied promises |
| 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 |
Not-for-profit implementation guidance (Appendices F and G) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::F20-F27 | Not-for-profit entities: identify a performance obligation only where the promise is sufficiently specific as to nature, cost or value, quantity and period, judged against explicit and implicit conditions |
| aasb-15-revenue-from-contracts-with-customers::F28-F32 | Not-for-profit entities: presume the transaction price relates wholly to the goods or services unless a donation component is evident, and then split and account for the donation under AASB 1058 |
| aasb-15-revenue-from-contracts-with-customers::F5-F19 | Not-for-profit entities: recognise a customer contract only where an agreement is enforceable through legal or equivalent means and has commercial substance, treating the resource provider as customer even when goods or services go to third parties |
| aasb-15-revenue-from-contracts-with-customers::G11-G27 | Not-for-profit public sector licensors: apply the intellectual property guidance to IP licences, treat non-IP licences as rights to access or use the licensor's assets or rights, and use the short-term and low-value reliefs by class |
| aasb-15-revenue-from-contracts-with-customers::G3-G10 | Not-for-profit public sector licensors: distinguish a licence from a tax, split dual-purpose arrangements, and apply the Standard to statutory licences through the equivalent-means enforceability analysis |
Objective, core principle and scope, with the Australian scope paragraphs (paragraphs 1 to 8, Aus5.1 to Aus8.5) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::2-4 | Apply the core principle: recognise revenue as promised goods or services pass to the customer, at the consideration you expect, consistently across similar contracts, with the portfolio expedient available |
| aasb-15-revenue-from-contracts-with-customers::5-8 | Set the scope: all customer contracts except leases, insurance contracts, financial instruments and like-for-like exchanges, with the customer test and the split for contracts partly under other Standards |
| aasb-15-revenue-from-contracts-with-customers::Aus5.1-Aus7.1 | Australian scope modifications: not-for-profit capital grants, public sector licences and public sector insurance contracts |
| aasb-15-revenue-from-contracts-with-customers::Aus8.1-Aus8.5 | Not-for-profit public sector licensors: the election to leave short-term and low-value licences outside the five-step model |
Presentation and disclosure, with the Tier 2 relief (paragraphs 105 to 129, B87 to B89, AusE1) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::105-109 | Present each contract as a contract asset or contract liability by comparing performance with payment, show unconditional rights separately as receivables, and impair contract assets under AASB 9 |
| aasb-15-revenue-from-contracts-with-customers::110-115,B87-B89 | Disclose enough to show the nature, size, timing and uncertainty of revenue and the cash flows behind it: revenue and impairment from customer contracts separately, and revenue disaggregated into categories tied to economic drivers, reconciled to segment revenue |
| aasb-15-revenue-from-contracts-with-customers::116-118 | Disclose contract balances: opening and closing receivables, contract assets and liabilities, revenue released from opening contract liabilities and from prior-period performance, and explain the timing relationship and significant movements |
| aasb-15-revenue-from-contracts-with-customers::119-122 | Describe performance obligations and disclose the transaction price allocated to remaining obligations with the expected timing, applying and explaining the short-duration and right-to-invoice expedients |
| aasb-15-revenue-from-contracts-with-customers::123-129 | Disclose the significant judgements on timing and measurement, the methods, inputs and assumptions used, the judgements and amortisation method for contract cost assets with their balances and charges, and the practical expedients elected |
Satisfying performance obligations and measuring progress (paragraphs 31 to 45, B2 to B19) – AASB 15 Revenue from Contracts with Customers
| Code | Title |
|---|---|
| aasb-15-revenue-from-contracts-with-customers::31-34 | Recognise revenue when or as control of the promised asset passes to the customer, taking any repurchase agreement into account |
| aasb-15-revenue-from-contracts-with-customers::35-37,B2-B13 | Recognise revenue over time only when one of the three criteria is met: simultaneous consumption, customer-controlled work in progress, or no alternative use plus an enforceable right to payment |
| aasb-15-revenue-from-contracts-with-customers::38 | For point-in-time obligations, decide when control passes using the control requirements plus the indicators: right to payment, legal title, physical possession, risks and rewards, and customer acceptance |
| aasb-15-revenue-from-contracts-with-customers::39-45,B14-B19 | Measure progress toward complete satisfaction with one method per obligation applied consistently, output or input based, updated each period, and cap revenue at recoverable cost when progress cannot be measured reasonably |
What is AASB 15 Revenue from Contracts with Customers and who does it apply to?
AASB 15 Revenue from Contracts with Customers is a compliance framework from Australia (Commonwealth) with 9 domains and 41 controls. The Australian adoption of IFRS 15: the five-step revenue model (identify the contract and its performance obligations, determine and allocate the transaction price, recognise revenue as control passes), the rules for variable consideration and its constraint, financing components, contract costs, contract assets and liabilities and the disclosure package, the application guidance for warranties, principal and agent, options, licensing, repurchase, consignment and bill-and-hold arrangements, and the Australian not-for-profit and public sector licensor guidance. It is used by organisations to establish and maintain compliance with industry standards and regulatory requirements.
What does AASB 15 Revenue from Contracts with Customers actually require?
AASB 15 Revenue from Contracts with Customers has 41 controls organised across 9 domains. The largest domains are Application guidance on specific arrangements (paragraphs B28 to B86) – AASB 15 Revenue from Contracts with Customers (7 controls), Determining the transaction price (paragraphs 46 to 72, B20 to B27) – AASB 15 Revenue from Contracts with Customers (7 controls), Not-for-profit implementation guidance (Appendices F and G) – AASB 15 Revenue from Contracts with Customers (5 controls). Each control defines specific requirements that organisations must implement to achieve compliance.
If I already comply with another framework, how much of AASB 15 Revenue from Contracts with Customers do I already cover?
AASB 15 Revenue from Contracts with Customers does not currently have cross-framework mappings in our system. Check back as we continuously expand our mapping database.
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