Question

Can we recognize revenue if the customer hasn’t signed the contract but has accepted the goods?”

Answer

IFRS 15 is quite flexible, as it doesn’t require a signed contract, just an enforceable agreement.

And, we must assess enforceability of the agreement practically under IFRS 15, based on substance, not just formalities.

So, for example, if you have strong evidence, like a confirmed PO, or customer accepted the terms by email, then you might say that the agreement is enforceable – especially when your local courts would accept email confirmations as a done deal.

But here’s the catch:

If your local contract law doesn’t recognize emails or verbal agreements as enforceable, then no signature usually means no revenue.

As a result, you might need to recognize the goods delivered to your customer as some sort of receivable only, but not revenue.

Revenue without contract IFRS 15