Project Revenue under IFRS 15

[Solowing]

Entity T is a state owned entity. The Government has entered into an agreement with a foreign donor to carry out a project. They have decided that once the donor provides the funds to the Government, Entity T will be carrying out the performance obligations set out in the contract on behalf of the Government.

The project is for 2 years, with 10 separate performance obligations. For 2 of the obligations Entity T has to setup a Call Center on land provided by the Government, the agreement is setup in a way where the Government starts using the premises even if not fully completed. (Leading me to think these 2 could fall under over time?)

The rest of the obligations are made in a way where the Government can only obtain the benefits after Entity T completes the project and hands it over.

Entity T has currently calculated the potential revenue to be recognized based on two methods;
a) Input method (Cost)
b) Progress method (Based on percent of project completed)

So my question is, under IFRS 15 how should the revenue be recognized?

[nauman]

I am questioning whether IFRS should even be applied here. I don’t think the receipt of funds / grants qualify as revenue.

[Marek Muc]

Hi Nauman, it's been a while since you last posted, welcome back!

I agree that this doesn't seem to be a contract within the scope of IFRS 15:
https://ifrscommunity.com/knowledge-bas ... k-customer

@Solowing, what are the cash flows and settlement terms between the government and Entity T?