This free, guided checker walks your finance team through the key decision points for IFRS 15 Subscription Software and SaaS. Answer a few questions to see the likely treatment and the evidence to document.
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Confirm the offering is entity-hosted software the customer reaches online for a fee, and that the arrangement is a contract with a customer within IFRS 15 (IFRS 15.6). Weigh the product architecture and order form: does the customer take possession of the software, or only access it while the entity hosts it? The common trap is treating every software sale as a licence when a hosted subscription is a service assessed under IFRS 15.B52-B63.
SaaS-specific revenue analysis does not apply; assess perpetual licences or other arrangements under the general IFRS 15 model (IFRS 15.6).
Official guidance: IFRS issued standards
Assess approval, identifiable rights to access software, payment terms, and collectability for recurring subscription fees and any upfront charges.
Do not recognise subscription revenue until the IFRS 15.9 contract criteria are met; record any consideration received as a liability (IFRS 15.14; IFRS 15.106).
Official guidance: IFRS issued standards
IFRS 15.B58 distinguishes a software licence granting right to use IP from a service where the entity provides access to software without transferring a licence; SaaS is typically a service.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
Test the hosted access against both distinct criteria: the customer can benefit from it on its own or with readily available resources, and the promise is separately identifiable in the contract (IFRS 15.27). Weigh whether hosting, maintenance, and routine updates are inputs to a single access service or separable promises. The common trap is splitting out routine maintenance and support that are not separately identifiable from the SaaS access itself.
Identify the distinct SaaS and hosting performance obligations before allocating the transaction price (IFRS 15.27).
Official guidance: IFRS issued standards
Assess whether the customer can benefit from the licence separately and whether implementation or support is separately identifiable in the contract context.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
Set a standalone selling price for each distinct obligation, preferring the observable price when the item is sold separately (IFRS 15.77). Where no observable price exists, estimate it using an adjusted market assessment or expected cost plus a margin, and reserve the residual approach for highly variable or uncertain prices (IFRS 15.79). The common trap is defaulting to the contract price as the SSP when the item is regularly sold at other prices.
Complete the standalone-selling-price analysis for the SaaS, licence, and service obligations before allocation (IFRS 15.78).
Official guidance: IFRS issued standards
Include recurring subscription fees and any non-refundable upfront fees in transaction price; allocate across SaaS service, licence, and professional services obligations.
Allocate the transaction price across the subscription obligations on a relative standalone-selling-price basis (IFRS 15.74).
Official guidance: IFRS issued standards
SaaS meets the over-time criterion because the customer simultaneously receives and consumes the benefit of continuous access as the entity performs (IFRS 15.35(a)). Select a measure of progress that depicts that transfer, usually straight-line for even access, and defer prepaid fees as a contract liability. The common trap is recognising the annual or multi-year fee up front on billing rather than across the access period.
Recognise SaaS revenue over the subscription term rather than at inception or on billing (IFRS 15.35(a)).
Official guidance: IFRS issued standards
A licence that is a right to use the IP as it exists when granted transfers control at a point in time, on delivery or activation (IFRS 15.B61). Confirm the right-to-use classification and document the control-transfer indicators before setting the trigger (IFRS 15.38). The common trap is recognising a right-to-use licence over time, or recognising before the licence period begins and the software is made available.
Document the control-transfer indicators establishing point-in-time recognition for the licence (IFRS 15.38; IFRS 15.B61).
Official guidance: IFRS issued standards
Amounts billed or received before the entity performs are contract liabilities that are released to revenue as the service is delivered (IFRS 15.106). Reconcile billings, cash received, and revenue recognised to the opening and closing deferred balance, and identify revenue recognised in the period from the opening liability (IFRS 15.116). The common trap is leaving deferred revenue unreconciled so recognition drifts from the service period.
Build the contract-liability rollforward for deferred subscription revenue (IFRS 15.116).
Official guidance: IFRS issued standards
Cover the licence-versus-service judgement, the allocation method, over-time versus point-in-time recognition, contract balances and their movements, and remaining performance obligations (IFRS 15.119; IFRS 15.120; IFRS 15.123). Weigh whether the significant judgements affecting the amount and timing of revenue are explained. The common trap is omitting the SaaS-versus-licence judgement and the remaining-performance-obligation disclosure.
Subscription software and SaaS revenue recognition and disclosure appear complete under IFRS 15 (IFRS 15.119). Complete the IFRS 15 SaaS disclosures before sign-off (IFRS 15.119; IFRS 15.123).
Official guidance: IFRS issued standards
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