Key takeaway
Cash received, revenue recognized and cash available for obligations answer different questions.
Prepare evidence for the accounting decision
A company can receive a license payment before delivering every promised item. The director needs a schedule that explains the cash event and the remaining work, rather than a report that treats the bank receipt as the whole earnings result. Whether and when an actual transaction creates revenue is a separate accounting decision.
The IFRS Foundation’s public IFRS 15 summary describes identifying the contract and distinct performance obligations, determining the transaction price, allocating it using relative stand-alone selling prices and recognizing revenue as the obligations are satisfied. The public summary was checked 11 October 2026. This guide uses those concepts to prepare an accountant-facing brief; it does not establish that IFRS 15 applies to your company or resolve a real license’s treatment.
Complete a conditional performance schedule
Assume a hypothetical one-customer contract collects USD 48,000 on 1 November 2026. For this illustration only, assume the snapshot and six months of refresh services are distinct promises, with stand-alone selling-price estimates of USD 30,000 and USD 18,000. Because those estimates total the stated consideration, the assumed allocations are USD 30,000 and USD 18,000. No actual accountant has approved these invented conclusions.
Also assume the snapshot’s applicable control-transfer condition occurs on 15 November, and the service is satisfied evenly from December through May at USD 3,000 a month. The table follows those assumptions. USD 48,000 arrives on day one, while assumed recognized revenue is then zero. At the end of February, the snapshot and three service months give USD 39,000 cumulatively; USD 9,000 remains associated with unfulfilled service.
| Illustrative date | Cumulative cash collected | Cumulative revenue under assumptions | Amount allocated to unfulfilled promises |
|---|---|---|---|
| 1 Nov 2026 | USD 48,000 | USD 0 | USD 48,000 |
| 15 Nov 2026 | USD 48,000 | USD 30,000 | USD 18,000 |
| 31 Dec 2026 | USD 48,000 | USD 33,000 | USD 15,000 |
| 28 Feb 2027 | USD 48,000 | USD 39,000 | USD 9,000 |
| 31 May 2027 | USD 48,000 | USD 48,000 | USD 0 |
Keep the performance assumptions open to review
Give the accountant the actual contract, promised deliverables, permitted use, delivery evidence, acceptance conditions, refresh cadence, support commitment and available stand-alone-price evidence. An invoice or transfer receipt cannot demonstrate every relevant performance event. The accountant should determine whether the promises are distinct and how the applicable transaction price and recognition pattern are established.
If the real snapshot and service form one combined obligation, if the license has different control or ongoing-access characteristics, or if progress is not even, the illustration’s allocation or timing may change. Variable payments, concessions, refunds and contract changes need their own assessment. Do not retain the example’s monthly figure after replacing its assumptions. The public summary is not the full normative standard, and the subscription-required standard text was not read for this article.
Distinguish the unfulfilled amount from a cash reserve
IFRS staff educational material describes contract liabilities associated with advance payments before goods or services are provided. That October 2023 material is a useful explanation, not a binding conclusion about this invented contract. Ask the accountant which balances and disclosures arise under the company’s applicable accounting framework. The example’s unfulfilled amount is neither a calculated reserve policy nor a statement that the cash must sit in a separate account.
Keep a separate hypothetical cash-cost scenario: USD 4,000 preparation before a deal, and USD 500 monthly delivery cost for six service months if the license occurs. With the assumed USD 48,000 receipt, cash remaining after those stated USD 7,000 costs is USD 41,000, before tax and omitted costs. That amount is not recognized accounting profit. If no license occurs, only the USD 4,000 preparation outflow occurs; there is no receipt or monthly delivery cost. Already-incurred preparation belongs in this cash history; deciding on future delivery asks separately which future costs change.
Give the director two views with one evidence trail
The completed brief should show the cash schedule and the proposed performance schedule side by side, identify which conclusions need the accountant’s approval and assign evidence for each delivery or service period. Finance can then distinguish a paid amount from work still due. A commercial owner can separately track whether the agreed payment trigger was met; meeting that trigger does not resolve every accounting question.
Earnings can hold the explicitly hypothetical receipt and cash costs; Offer comparison can preserve payment and service differences. Neither tool determines revenue recognition. VOID has no upfront seller referral fee and may receive conditional receiving-program compensation; disclose the applicable arrangement separately instead of inventing a seller deduction. Named-recipient introductions, samples and licenses still require separate decisions. The figures here are a review example, not a value estimate, promised income or transaction accounting clearance.