The five steps
Identify the customer contract; identify the performance obligations; determine the transaction price; allocate the price to those obligations; recognise revenue when or as each obligation is satisfied.
SFRS 115
Getting paid is not always the same as earning revenue.
SFRS 115 governs when a business recognises revenue from customer contracts. The five-step model looks at the contract, performance obligations, transaction price, allocation, and when control transfers.
Why SME owners feel the pain
Professional services, subscriptions, retainers, deposits, and milestone work can all create timing questions. Cash receipt, invoice date, and revenue recognition are not always the same thing.
What the agent should do
The useful product behavior is to draft the treatment, point to the SFRS 115 step that drove it, preserve the contract or invoice evidence, and route ambiguous timing questions to review.
This is general accounting information for product context. Confirm SFRS 115 treatment with a qualified accountant or adviser.
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