IFRS 15 sets out a 5-step model for recognising revenue: (1) identify the contract, (2) identify performance obligations, (3) determine the transaction price, (4) allocate the price to each obligation, and (5) recognise revenue as each obligation is satisfied. Example: a company sells a machine with 2 years of free servicing — the sale price must be split between the machine (recognised on delivery) and the servicing (recognised over 2 years).