Conceptual principles of financial reporting

IFRS 15 — Revenue from Contracts with Customers

Five Steps:

1. Contract Identification
2. Determining the Performance Obligations
3. Determining the Transaction Price
4. Price Allocation
5. Revenue Recognition (as or when Performance occurs)

Type of Performance	Example	Recognition
At the Time	Sale of Goods	Upon Transfer Control
Over time	Services, construction	Proportional to the degree of completion

Variable consideration: included unless renegotiated.
Contract assets/liabilities – reflected in advances and revenue.

IFRS 16 — Leases

A lease is the transfer of the right to use an asset for compensation.

Accounting by the lessee:

• Right-of-use asset
• Lease liability

At the commencement date: PV of lease payments = cost of the asset.

Model	Essence	Exceptions
Full accounting (RoU + liability)	For all contracts >12 months	Short-term and low cost
Lessor accounting	Finance and operating leases

IFRS 10 / IAS 28 / IFRS 3 — Consolidation and Investments

Concept	Definition
Control	Power + Variable Benefits + Ability to Influence
Associate	Influence (20–50%) — Equity Method
Joint Venture	Joint Control — Equity Accounting
Subsidiary Company	Complete control — consolidation
Goodwill	Reimbursement + accrued interest — net assets of the subsidiary

Goodwill impairment — annual test under IAS 36.

Unrealized gain between the group and the subsidiary — eliminated proportionately.