Appendix A

BC84 IFRS 15 distinguishes between obligations to provide goods or services to a customer and other obligations by defining those obligations to provide goods or services as performance obligations. The notion of a performance obligation is similar to the notions of deliverables, components or elements of a contract in previous revenue Standards. Although the notion of a performance obligation is implicit in previous revenue Standards, the term 'performance obligation' has not been defined previously.

BC85 The boards' objective in developing the definition of a performance obligation was to ensure that entities appropriately identify the unit of account for the goods and services promised in a contract with a customer. The boards decided that because the revenue recognition model is an allocated transaction price model, identifying a meaningful unit of account that depicts the goods and services in the contract is fundamental for the purpose of recognising revenue on a basis that faithfully depicts the entity's performance in transferring the promised goods or services to the customer.

BC86 The boards decided that a performance obligation could be either of the following:

(a) a good or service (or a bundle of goods or services) that is distinct (see paragraphs BC94-BC112); or

(b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer (see paragraphs BC113-BC116).