BC322 When an entity performs first by satisfying a performance obligation before a customer performs by paying the consideration, the entity has a contract asset - a right to consideration from the customer in exchange for goods or services transferred to the customer.

BC323 In many cases, that contract asset is an unconditional right to consideration - a receivable - because only the passage of time is required before payment of that consideration is due. However, in other cases, an entity satisfies a performance obligation but does not have an unconditional right to consideration, for example, because it first needs to satisfy another performance obligation in the contract. The boards decided that when an entity satisfies a performance obligation but does not have an unconditional right to consideration, an entity should recognise a contract asset in accordance with IFRS 15. The boards noted that making the distinction between a contract asset and a receivable is important because doing so provides users of financial statements with relevant information about the risks associated with the entity's rights in a contract. That is because although both would be subject to credit risk, a contract asset is also subject to other risks, for example, performance risk.