5. Recognize revenue when (or as) the company fulfils performance obligations.

This can happen at a specific point in time (typically for goods) or over a period of time (typically for services). If a performance obligation is fulfilled over a period of time, the company recognizes revenue over time. The transfer of goods is completed if the goods are under the control of the customer (IFRS 15.31).

A fulfillment over time occurs (IFRS 15.35) if

– the customer simultaneously receives and consumes the benefits as the company fulfils its obligation,

– the company creates or enhances an asset that is already controlled by the customer or

– there is no alternative use for the asset and the company has an enforceable right to be paid to date.

Depending on the business model of the reporting entity, the revenue recognition can differ substantially between German GAAP and IFRS due to the substantially different approach of IFRS 15.