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Chapter 5 — Step 2: Identify the Performance Obligations

5.2 Promises in Contracts With Customers

5.2 Promises in Contracts With Customers

Footnotes

[1]
In April 2016, the FASB issued ASU 2016-10. As a result of ASU 2016-10, the customer’s “valid” expectation, as discussed in paragraph BC87 of ASU 2014-09, was changed to the customer’s “reasonable” expectation under ASC 606-10-25-16.
2
The IASB did not amend IFRS 15 to expressly address immaterial promises. Accordingly, IFRS 15 does not include similar guidance on determining the materiality of promised goods or services. Rather, an entity’s overall materiality considerations should be used in the evaluation of promised goods or services under IFRS 15. The boards do not expect a significant difference in application. For a summary of differences between U.S. GAAP and IFRS Accounting Standards on revenue-related topics, see Appendix A.
3
Such a preproduction activity could be a performance obligation in its own right or could form part of a larger performance obligation.
4
The IASB did not amend IFRS 15 to expressly address shipping and handling activities. Accordingly, IFRS 15 does not include similar elections. See Appendix A for a summary of differences between U.S. GAAP and IFRS Accounting Standards on revenue-related topics.