Which conditions must both be met for a good or service to be considered 'distinct' under IFRS 15?
Understand the Problem
The question is asking about the criteria that must be met for a good or service to be considered 'distinct' according to IFRS 15 (International Financial Reporting Standards 15 - Revenue from Contracts with Customers). IFRS 15 provides guidance on revenue recognition, and 'distinct' is a key concept in determining how revenue should be allocated and recognized in a contract with a customer.
Answer
A good or service is 'distinct' under IFRS 15 if the customer can benefit from it independently or with other resources, and it is distinct within the contract's context.
Under IFRS 15, a good or service is considered 'distinct' if both of these conditions are met:
- The customer can benefit from the good or service on its own or together with other available resources (capable of being distinct).
- The good or service is distinct within the context of the contract.
Answer for screen readers
Under IFRS 15, a good or service is considered 'distinct' if both of these conditions are met:
- The customer can benefit from the good or service on its own or together with other available resources (capable of being distinct).
- The good or service is distinct within the context of the contract.
More Information
IFRS 15 is an International Financial Reporting Standard that provides guidance on revenue recognition for contracts with customers. Determining whether a good or service is distinct is crucial for correctly identifying performance obligations within a contract.
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