Revenue Recognition Errors under AASB 15
Definition
Enterprise license agreements often bundle licences with support or services, requiring allocation of transaction price under AASB 15. Errors in determining point-in-time vs over-time recognition or misallocating prices result in deferred revenue issues or premature recognition, leading to audit findings and financial restatements.
Key Findings
- Financial Impact: AUD 20,000-50,000 per major audit adjustment; 2-5% revenue restatement typical for software firms
- Frequency: Per enterprise contract negotiation cycle; annual audit exposure
- Root Cause: Complex manual analysis of performance obligations in bundled software licences
Why This Matters
The Pitch: Data security software players in Australia waste AUD 20,000+ annually on audit adjustments and restatements from revenue recognition errors. Automation of contract analysis and obligation tracking eliminates this risk.
Affected Stakeholders
CFO, Revenue Accountants, Contracts Managers
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Deferred Revenue Drag from Licence Obligations
ATO Audit Risks from Revenue Misrecognition
ATO BAS Lodgement Penalties for Inaccurate Revenue Reporting
Delayed Invoicing from ARR Forecast Disputes
Churn Risk from Inaccurate ARR Guidance to Sales
Partner Commission Miscalculation Penalties
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