What is the primary requirement for recognising revenue under IFRS 15?

The primary requirement for recognising revenue under IFRS 15 is the satisfaction of performance obligations. IFRS 15 establishes a comprehensive framework for revenue recognition, requiring entities to recognise revenue when they transfer control of goods or services to customers at the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

This principle emphasizes that revenue is only recognised once the performance obligation is satisfied, meaning that the customer has received the benefits of the good or service provided. This approach shifts the focus from the timing of the sale, such as the point of sale or the collection of payment, to when the actual goods or services have been delivered and control has effectively passed to the customer.

In summary, the core of IFRS 15 is about ensuring that revenue is recognised in a way that accurately reflects the transfer of goods or services to customers, aligning the recognition process more closely with the delivery of value to the customer. This principle helps to provide reliable and relevant financial information regarding an entity’s revenue-generating activities.