What is IFRS 15: Revenue from Contracts with Customers?
IFRS 15 is the international accounting standard that establishes a five-step model for recognizing revenue from contracts with customers, applicable across all industries.
How It Works
- Identify the contract and the performance obligations.
- Determine and allocate the transaction price.
- Recognize revenue when (or as) each performance obligation is satisfied.
Saudi Context
SOCPA adopted IFRS 15 for Saudi reporting. It has reshaped revenue recognition for Saudi telecom, construction, and software businesses, especially around bundled contracts.
Example
A Saudi telco selling a SAR 3,000 phone bundled with a 24-month plan splits the price between hardware (recognized upfront) and service (recognized over time) per IFRS 15.