According to IFRS 15, how is revenue defined?

According to IFRS 15, how is revenue defined?

• A. As the total profit earned from all business activities
• B. As the consideration received or receivable from sales of goods/services
• C. As income generated through investment activities
• D. As rents received from leasing commercial properties

Answer: (B)

Revenue, according to IFRS 15, is defined specifically as the consideration received or receivable from the sale of goods or services. This definition focuses on transactions resulting from the exchange of goods or services for payment, which is fundamental to businesses in recognizing income from their primary operations. IFRS 15 outlines a comprehensive framework for recognizing revenue, emphasizing the transfer of control of goods and services to customers. It establishes that revenue should be recognized when the performance obligations are satisfied, which aligns with the notion of when an entity effectively earns its revenue. The other options do not accurately represent the broad definition of revenue under IFRS 15. Total profit, investment income, or rent from leasing do not encompass the full scope of what revenue is classified as under this specific framework. While these can contribute to a company's overall earnings, they fall into different categories of income and are governed by different accounting standards and principles.

Revenue, according to IFRS 15, is defined specifically as the consideration received or receivable from the sale of goods or services. This definition focuses on transactions resulting from the exchange of goods or services for payment, which is fundamental to businesses in recognizing income from their primary operations.

IFRS 15 outlines a comprehensive framework for recognizing revenue, emphasizing the transfer of control of goods and services to customers. It establishes that revenue should be recognized when the performance obligations are satisfied, which aligns with the notion of when an entity effectively earns its revenue.

The other options do not accurately represent the broad definition of revenue under IFRS 15. Total profit, investment income, or rent from leasing do not encompass the full scope of what revenue is classified as under this specific framework. While these can contribute to a company's overall earnings, they fall into different categories of income and are governed by different accounting standards and principles.