05.2025 IFRS 15 Revenue 1

Company A receives an email from Company B requesting to purchase enterprise management software. The email clearly specifies quantity, price, and implementation schedule. Though no formal contract is signed, A delivers the software and issues an invoice. Under IFRS 15, does this situation meet the definition of a “contract” for revenue recognition?

• Yes, because the email clearly outlines transaction terms

• No, because there is no formal written contract

• No, because the customer has not yet paid

• Yes, if there is evidence that both parties approved the terms and rights/obligations are clear

Company C signs a contract to sell equipment worth VND 200 million to a newly established startup without stable cash flow. After delivery, the customer becomes unable to pay. Under IFRS 15, should revenue be recognized?

• Yes, because the equipment has been delivered

• Yes, because there is a signed contract with clear terms

• No, because it is not probable that economic benefits will be received

• Yes, if the unpaid amount is reclassified as a doubtful debt

Parent company X sells software to subsidiary Y for VND 5 billion, while the market price is only about VND 1 billion. The contract excludes any maintenance or technical support. Why might this contract fail to qualify for revenue recognition under IFRS 15?

• Because the transaction lacks commercial substance

• Because intra-group sales are not recognized

• Because the software has no real value

• Because the subsidiary is not a customer

Can Company Z recognize revenue under IFRS 15 at this stage?

• Yes, because the MoU is signed

• No, because the contract lacks clear approval and terms

• Yes, if some construction work has begun

• Yes, if the client appears committed

Tech Company D provides software to an international partner, with payment in cryptocurrency. Due to high price volatility, the crypto value cannot be reliably translated into fiat currency at contract inception. Should revenue be recognized under IFRS 15?

• Yes, if the customer agrees to pay

• Yes, if the company uses the current exchange rate

• No, because economic benefits cannot be measured reliably

• Yes, if the customer is a reputable organization

At the end of the fiscal quarter, Company A delivers a machinery batch worth VND 1 billion to Company B. Before delivery, the finance department had warned that B was in financial distress. Despite this, management records revenue. According to IFRS 15, how should this revenue recognition be treated?

• Appropriate, because goods were delivered

• Appropriate if the contract was signed and terms are clear

• Inappropriate due to failure to meet collectability condition

• Appropriate if bad debt provision is booked afterward

Company A signs a contract to sell software bundled with 3 months of technical support. The contract describes the package as “all-inclusive software and support,” priced at VND 120 million. Under IFRS 15, should Company A treat the software and support service as separate performance obligations?

• No, because the contract describes it as a single package

• Yes, if the customer can use the software independently of support

• No, since the support lasts only 3 months

Company B sells medical equipment, including transportation, installation, and calibration services. The equipment has been delivered to the hospital’s storage, but has not yet been installed or certified. Can Company B recognize all revenue upon delivery?

• Yes, because title and risk have transferred

• Yes, if the customer signed a delivery receipt

• No, because the performance obligation is not yet fulfilled

• Yes, if the contract does not specify installation requirements

Company C signs a turnkey contract to design, manufacture, and install an industrial air filtration system. The customer cannot use any part of the system separately or hire others to complete individual stages. Should Company C treat the contract as three separate performance obligations?

• Yes, because each step is a separate service

• No, because the customer cannot benefit from each part independently

• Yes, if each step has a standalone price

• No, because the contract does not require separation

Company A signs a turnkey contract to design, build, and hand over a wastewater treatment system. The contract includes engineering, equipment purchase, construction, installation, and trial operations. How should Company A recognize revenue?

• Split into multiple obligations and recognize revenue separately

• Treat as one performance obligation and recognize revenue over time

• Recognize full revenue upon installation completion

• Allocate revenue per estimated value of each stage