How is revenue defined in IFRS 15?

How is revenue defined in IFRS 15?

• A. The gross inflow of economic benefits during the period arising in the course of the entity's ordinary activities, when those inflows increase equity, other than contributions from entity shareholders
• B. Net cash inflows from operating activities
• C. The total cash receipts from customers
• D. The net income after tax

Answer: (A)

Revenue under IFRS 15 is the gross inflow of economic benefits arising from the ordinary activities of an entity that increases equity, other than increases from contributions by owners. In practical terms, it’s the total consideration the entity expects to receive in exchange for goods or services, recognised on the transfer of control to the customer and on an accrual basis, not dependent on when cash is received. It can include non-cash consideration and is not net of expenses or taxes. The other options describe cash-flow concepts or post-cost profit measures, which are different from the IFRS 15 definition of revenue.

Revenue under IFRS 15 is the gross inflow of economic benefits arising from the ordinary activities of an entity that increases equity, other than increases from contributions by owners. In practical terms, it’s the total consideration the entity expects to receive in exchange for goods or services, recognised on the transfer of control to the customer and on an accrual basis, not dependent on when cash is received. It can include non-cash consideration and is not net of expenses or taxes.

The other options describe cash-flow concepts or post-cost profit measures, which are different from the IFRS 15 definition of revenue.