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hello sir I was reading IFRS 15 and couldn’t get revenue recorded in a “point in time” and revenue recorded “over a period” and where does construction contracts and percentage of completion now be included?
furthermore with the new standard of IFRS 15 , is differed income now non-existent?
Revenue earned at a moment in time is revenue that is earned at the time the contract is made
Think in terms of buying a fruit drink at your local shop. the shop-keeper records that revenue at the moment that the sale is made
But if you enter into a contract to construct an asset over a period of 4 years, or you sell an asset together with a three years maintenance agreement, the profits on those contracts is not entirely achieved at the moment of contract
In the first case the contract would need to specify dates / times / percentages for when the constructor should invoice for work completed to date
In the second case profit on the sale is achieved immediately but the profit on the three year maintenance activities is spread over a period (3 years!)
I believe that that answers your first paragraph
As for deferred income … surely the three year maintenance contract situation tells you that the concept of deferred income lives on
OK?
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