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IFRS 15 states that if the timing of payments provides the business with a financing benefit then the amount needs to be adjusted for the time value of money.
Say a customer purchases a £10,000 service, putting down a 10% deposit 1 year in advance, would the company providing the service record the contract liability at present value and then increase it at year-end to account for the time value of money?
And does this mean that the total revenue recognised when the service is provided is greater than the £10,000 selling price?
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