Revenue for Telecoms

54 | Revenue for Telecoms – Issues In-Depth
| 3 Step 2: Identify the performance obligations in the contract
606-10-25-15
[IFRS 15.23]
The goods or services are substantially the same
+
Each distinct good or service in the series is a performance
obligation satisfied over time
(see 6.2)
+
The same method would be used to measure progress toward
satisfaction of each distinct good or service in the series
(see 6.3)
=
A single performance obligation
Example 21 – Term cable television contract with fixed fee and
unlimited usage
Cable Company R enters into a two-year service contract with Customer M
to provide cable television services for a fixed fee of 100 per month. Cable
Company R has concluded that its cable television services are satisfied over
time because Customer M receives and consumes the benefit from the services
as they are provided – e.g. customers generally benefit from each day that they
receive Cable Company R’s services.
Cable Company R determines that each increment of its services – e.g. day or
month – is distinct because Customer M benefits from that period of service
on its own and each increment of service is separately identifiable from those
preceding and following it – i.e. one service period does not significantly affect,
modify or customize another.
However, Cable Company R applies the series guidance and concludes that its
contract with Customer M is a single performance obligation to provide two years
of cable television service because each of the distinct increments of services
is satisfied over time and the same method would be used to measure progress
(see 6.3 for a discussion of measure of progress).
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