Yakub02
Banned
Definition A contract is an agreement between two or more parties that creates enforceable rights and obligations.
A contract does not exist if each party has an enforceable right to terminate a wholly unperformed contract without compensating the other party.
Combination of contracts Two or more contracts entered into at or near the same time with the same customer (or related parties) must be combined and treated as a single contract if one or more of the following conditions are present:
the contracts are negotiated as a package with a single commercial objective;
the amount of consideration to be paid in one contract depends on the price or performance of the other contract; or
the goods or services promised in the contracts (or some goods or services promised in the contracts) are a single performance obligation.
Application criteria The general IFRS 15 model applies only when or if:
the parties have approved the contract and are committed to perform their respective obligations;
the entity can identify each party’s rights; the entity can identify the payment terms for the goods and services to be transferred;
the contract has commercial substance (i.e. it is expected to change the risk, timing or amount of an entity’s future cash flows); and
it is probable the entity will collect the consideration.
A contract does not exist if each party has an enforceable right to terminate a wholly unperformed contract without compensating the other party.
Combination of contracts Two or more contracts entered into at or near the same time with the same customer (or related parties) must be combined and treated as a single contract if one or more of the following conditions are present:
the contracts are negotiated as a package with a single commercial objective;
the amount of consideration to be paid in one contract depends on the price or performance of the other contract; or
the goods or services promised in the contracts (or some goods or services promised in the contracts) are a single performance obligation.
Application criteria The general IFRS 15 model applies only when or if:
the parties have approved the contract and are committed to perform their respective obligations;
the entity can identify each party’s rights; the entity can identify the payment terms for the goods and services to be transferred;
the contract has commercial substance (i.e. it is expected to change the risk, timing or amount of an entity’s future cash flows); and
it is probable the entity will collect the consideration.