The International Accounting Standards Board issued Clarifications to IFRS 15 Revenue from Contracts with Customers in April 2016. The amendments, which are effective from 1 January 2018, clarify how companies:
- identify a performance obligation—the promise to transfer a good or a service to a customer—in a contract;
- determine whether a company is a principal (the provider of a good or service) or an agent responsible for arranging for the good or service to be provided; and
- determine whether the revenue from granting a licence should be recognised at a point in time or over time.