paragraph 38

BC153 The boards decided that all performance obligations that do not meet the criteria for being satisfied over time should be accounted for as performance obligations satisfied at a point in time. For performance obligations satisfied at a point in time, the performance obligation is satisfied at the point in time when control of the goods or services transfers to the customer. The boards included indicators of the transfer of control in paragraph 38 of IFRS 15.

BC154 Many respondents commented that the indicators were useful for contracts for the sales of goods to assist an entity in determining when it has transferred control of an asset (whether tangible or intangible). The boards included the indicator 'the customer has the significant risks and rewards of ownership of the asset' because of comments from respondents who disagreed with the boards' initial proposal to eliminate considerations of the 'risks and rewards of ownership' from the recognition of revenue. Respondents observed that risks and rewards can be a helpful factor to consider when determining the transfer of control, as highlighted by the IASB in IFRS 10 Consolidated Financial Statements, and can often be a consequence of controlling an asset. The boards decided that adding risks and rewards as an indicator provides additional guidance, but does not change the principle of determining the transfer of goods or services on the basis of the transfer of control.