Measuring progress towards complete satisfaction of a
performance obligation
39 For each performance obligation satisfied over time in accordance with
paragraphs 35–37, an entity shall recognise revenue over time by measuring the
progress towards complete satisfaction of that performance obligation. The
objective when measuring progress is to depict an entity’s performance in
transferring control of goods or services promised to a customer (ie the
satisfaction of an entity’s performance obligation).
40 An entity shall apply a single method of measuring progress for each
performance obligation satisfied over time and the entity shall apply that
method consistently to similar performance obligations and in similar
circumstances. At the end of each reporting period, an entity shall remeasure its
progress towards complete satisfaction of a performance obligation satisfied
over time.
Methods for measuring progress
41 Appropriate methods of measuring progress include output methods and input
methods. Paragraphs B14–B19 provide guidance for using output methods and
input methods to measure an entity’s progress towards complete satisfaction of
a performance obligation. In determining the appropriate method for
measuring progress, an entity shall consider the nature of the good or service
that the entity promised to transfer to the customer.
42 When applying a method for measuring progress, an entity shall exclude from
the measure of progress any goods or services for which the entity does not
transfer control to a customer. Conversely, an entity shall include in the
measure of progress any goods or services for which the entity does transfer
control to a customer when satisfying that performance obligation.
43 As circumstances change over time, an entity shall update its measure of
progress to reflect any changes in the outcome of the performance obligation.
Such changes to an entity’s measure of progress shall be accounted for as a
change in accounting estimate in accordance with IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.