Page 7 - How to prepare for IFRS 15_V3_JW_2
P. 7
Step 1 - Identify a contract with a customer
Identify the contract(s) with a customer
A contract is an agreement between two or more parties that creates enforceable rights and obligations. The requirements of IFRS 15 apply to each contract that has been agreed upon with a customer and meets specified criteria. In some cases, IFRS 15 requires an entity to combine contracts and account for them as one contract.
IFRS 15 also provides requirements for the accounting for contract modifications.
Relation between legal contracts and revenue accounting contract is not necessarily a 1 : 1 relation but can be n : 1!
Challenge in practice: Track and check legal contracts in order to combine them to revenue accounting contracts
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 7
