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Welcome to Financial Reporting – Module 3: Revenue from Contracts with Customers; Provisions, Contingent Liabilities and Contingent Assets! In this episode, we turn our focus to recognition and measurement—how entities determine when, and how much, revenue and related obligations should be reported in the financial statements.

We’ll unpack the five-step model for revenue recognition under AASB 15/IFRS 15: identifying contracts with customers, pinpointing distinct performance obligations, determining the transaction price, allocating that price, and recognizing revenue as performance obligations are satisfied. You’ll see how principles like control transfer, variable consideration, and contract modifications play out in practice.

We’ll also dive into provisions and contingencies under AASB 137/IAS 37—clarifying when to recognize a present obligation, how to measure it reliably, and what disclosures are required. Along the way, we’ll differentiate between provisions, contingent liabilities, and contingent assets, highlighting practical examples like warranties, onerous contracts, and litigation.

By the end, you’ll be able to apply the revenue recognition model confidently, assess provisions and contingencies with rigor, and present decision-useful information to financial statement users. Let’s get started.

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