5.4 Presentation and Disclosure

IFRS 15 requires the presentation of contract assets or liabilities on the balance sheet once performance of the contract occurs. Contract assets or liabilities should be reported separately from receivables under the contract. Receivables are defined as unconditional rights to consideration. The standard allows for alternate terminology in describing the contract asset/liability, as long as it is clearly distinguishable from the receivable.

The standard has fairly extensive quantitative and qualitative disclosure requirements for contracts with customers. These requirements were designed to address a deficiency in previous standards regarding the level of detail disclosed for revenue transactions. The disclosures provide information about the contracts themselves, the judgments applied in accounting for the contracts, and any assets recognized by creating or fulfilling the contract. Some of the key disclosures include:

• Revenue and impairment losses from contracts with customers
• Sufficient disaggregation of revenue categories to depict how the nature, amount, timing, and uncertainty of revenue amounts are affected by economic factors
• A reconciliation of opening and closing contract asset/liability balances, including an explanation of how satisfaction of performance obligations relates to the timing of customer payments
• A detailed description of performance obligations
• Details of transaction prices allocated to unsatisfied performance obligations
• Details of judgments applied in determining the performance obligations and the allocation of transaction prices to those obligations
• Explanations of methods used to determine the timing of satisfaction of performance obligations over time
• Details of methods, inputs, and assumptions used to determine and allocate trans- action prices
• Details of assets recognized from costs to obtain or fulfill a contract
• The application of any practical expedient allowed under the standard