TFRS 15 sets out a five-step model: (1) identify the contract, (2) identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations, (5) recognise revenue as the performance obligations are satisfied.
In areas such as construction, software, subscriptions and bundled sales, the timing of revenue requires significant judgement and is often a key audit matter.
Source: TFRS 15
Related terms
Performance obligationA promise in a contract with a customer to transfer a distinct good or service.RevenueIncome arising in the course of an entity's ordinary activities.Key audit mattersMatters that, in the auditor's professional judgement, were of most significance in the audit of the current-period financial statements and are described separately in the report.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Amortised costThe amount at which a financial asset or liability is measured at initial recognition, minus principal repayments, plus cumulative amortisation calculated using the effective interest method.AssociateAn entity over which the investor has significant influence but not control or joint control.
Last updated: October 22, 2026 · This definition is for general information only.