IPSAS 47
Active
Revenue
Establishes a single, unified revenue framework replacing IPSAS 9 and IPSAS 23, distinguishing transactions with and without binding arrangements and introducing compliance obligations, capital transfers, and variable consideration rules. Effective 1 January 2026.
Active Standard
IPSAS 47 Revenue is the current, active standard issued by the IPSASB establishing a single, comprehensive revenue framework for public sector entities. It replaces IPSAS 9 Revenue from Exchange Transactions and IPSAS 23 Revenue from Non-Exchange Transactions (Taxes and Transfers). Effective for periods beginning on or after 1 January 2026.
IPSAS 47 unifies the accounting for public sector revenue across transactions with and without binding arrangements. Its binding arrangement accounting model is drawn primarily from IFRS 15 Revenue from Contracts with Customers, adapted for the public sector with broader concepts including compliance obligations (encompassing internal resource use), capital transfers, and compelled transactions, alongside consolidated rules carried forward for taxes and transfers without binding arrangements.
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Objective, Scope & Out-of-Scope Items (paras. 1–3)
Objective – the unified successor to IPSAS 9 and IPSAS 23
Establishes principles for reporting useful information about the nature, amount, timing, and uncertainty of revenue and cash flows from revenue transactions. Requires an entity to determine the TYPE of revenue transaction first, then apply the corresponding accounting requirements – a single framework replacing the former IPSAS 9 (exchange) / IPSAS 23 (non-exchange) split.
Key exclusions (para. 3)
Social benefit scheme contributions under the IPSAS 42 insurance approach Public sector combinations (IPSAS 40); contributions from owners Lease contracts (IPSAS 43); insurance contracts Financial instruments (IPSAS 41) Rights/obligations from binding arrangements under IPSAS 19, 32, 34–37, 39, 40 Non-monetary exchanges between same-line-of-business entities to facilitate sales to resource providers Gains on non-financial asset sales that AREN'T an output of activities (IPSAS 16/45/31) Subsequent-measurement value changes; biological asset fair value changes (IPSAS 27); mineral resource extraction
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Definitions (para. 4)
Binding arrangement vocabulary
Binding arrangement
An arrangement conferring both rights and obligations, enforceable through legal or equivalent means, on the parties to it.
Compliance obligation
A promise in a binding arrangement to use resources internally for distinct goods/services, OR transfer distinct goods/services to a purchaser or third-party beneficiary.
Transaction consideration
The amount of resources to which an entity expects to be entitled.
Parties & non-exchange vocabulary
Purchaser
A resource provider that provides a resource in exchange for goods/services that are an output of the entity's activities, for its own consumption.
Third-party beneficiary
An entity, household, or individual who benefits from a transaction made between OTHER parties by receiving resources.
Transfer
A transaction, other than taxes, where an entity receives a resource without directly providing any good, service, or other asset in return.
Capital transfer
An inflow arising from a binding arrangement specifying the entity acquires/constructs a non-financial asset it will control.
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The Gateway Decision – Binding Arrangement or Not? (paras. 9–16)
The first question, always
At inception, an entity FIRST considers whether it has entered a revenue transaction WITH or WITHOUT a binding arrangement. Most public sector revenue arises WITHOUT one, or from arrangements that don't involve transferring distinct goods/services to external parties.
WITHOUT a binding arrangement → apply paras. 18–55 (§4–§5) WITH a binding arrangement → apply paras. 56–147 (§6–§15)
What makes an arrangement "binding"
Must be ENFORCEABLE through legal or equivalent means – substance over form governs; enforceability can arise through various mechanisms, so long as they give the entity ability to enforce terms and hold parties accountable (paras. 11–12). Rights/obligations under TAX law do NOT create a binding arrangement – the taxpayer's compliance duty and the government's collection right don't make taxation a binding-arrangement transaction (para. 8). Can be WRITTEN, ORAL, or IMPLIED by customary practice (para. 14).
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Revenue Without Binding Arrangements – Recognition & Measurement (paras. 17–35)
The asset/liability recognition logic – familiar from IPSAS 23
Recognize an ASSET if the inflow is presently CONTROLLED as a result of a past event, and its value is RELIABLY measurable
A mere ANNOUNCEMENT of intention to transfer resources is NOT sufficient for control (para. 22) – the destroyed-school example carries forward directly from IPSAS 23. Any associated OBLIGATION meeting the liability definition is recognized too (para. 26); revenue = the increase in net assets, recognized as the liability (if any) is satisfied, or IMMEDIATELY if no enforceable obligation exists (para. 29).
Measurement
Asset initially measured at TRANSACTION CONSIDERATION as at the recognition date; non-cash consideration measured at CURRENT VALUE (para. 30) Liability = best estimate to settle, capped at the associated asset's value on initial recognition; discounted if the time value of money is material (paras. 32–33) Revenue = the amount of the increase in net assets recognized (para. 34)
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Taxes (paras. 36–55)
Recognition trigger, and who recognizes it
Recognize an asset when the TAXABLE EVENT (or equivalent event for other compulsory contributions/levies) occurs AND recognition criteria are met
Revenue accrues ONLY to the government that IMPOSES the tax – a collecting agency acting for another government recognizes nothing of its own (para. 39). Taxes do NOT satisfy the contributions-from-owners definition (para. 40).
A framework carried forward almost entirely from IPSAS 23
The taxable-event-by-tax-type table, advance receipts, expenses paid through the tax system vs. tax expenditures, and the gross-measurement/no-offsetting rule ALL carry forward from IPSAS 23's own tax framework – see that Standard's poster (§7) for the detailed taxable-event table. IPSAS 47 consolidates this guidance while preserving its substance unchanged.
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The Binding Arrangement Accounting Model – the Five-Criteria Gate (paras. 56–61)
ALL five criteria required (para. 56)
Parties have APPROVED the arrangement and are COMMITTED to perform The entity can identify each party's RIGHTS The entity can identify the PAYMENT TERMS The arrangement has ECONOMIC SUBSTANCE – risk, timing, or amount of future cash flows/service potential is expected to change COLLECTION of the entitled consideration is PROBABLE – considering only the resource provider's ABILITY and INTENTION to pay
If criteria AREN'T met, revenue is recognized only when the compliance obligation is FULLY satisfied and consideration received is non-refundable, OR the arrangement is TERMINATED with non-refundable consideration retained (para. 58). Criteria are assessed at INCEPTION and NOT reassessed absent significant changed circumstances (para. 57).
"Wholly unsatisfied" arrangements aren't binding for this Standard's purposes
An arrangement is NOT treated as binding if EITHER party can unilaterally terminate it, without compensation, while it's WHOLLY UNSATISFIED – meaning NEITHER the entity has started performing NOR the resource provider has paid or become obligated to pay anything (paras. 59–60).
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Combination & Modification of Binding Arrangements (paras. 62–67)
When to combine – any ONE of three tests
Negotiated as a PACKAGE with a single objective Consideration in ONE depends on the OTHER's consideration/performance Promises across them form a SINGLE compliance obligation
Applied to two or more arrangements entered at or near the same time with the same resource provider (or related parties) (para. 62).
Modifications – separate arrangement, or blended treatment
Treated as a SEPARATE arrangement ONLY if scope increases with DISTINCT additional promises, AND consideration increases by the STAND-ALONE value of those additions (para. 65)
Otherwise, the REMAINING (not-yet-transferred) promises are accounted for as a prospective adjustment, a termination-and-new-arrangement, or a blend, depending on whether remaining goods/services are distinct from those already transferred (para. 66). A modification exists once the parties approve it – even amid a dispute over scope/consideration (para. 64).
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Identifying Compliance Obligations – the Distinct Goods/Services Test (paras. 68–77)
Two paths to a compliance obligation
A DISTINCT good or service (or bundle) A SERIES of distinct goods/services, substantially the same, with the SAME PATTERN of internal use/transfer
Every binding arrangement has AT LEAST ONE compliance obligation, because enforceability holds the entity accountable with little/no realistic alternative to avoid performing (para. 69). Implied promises count too – customary practices, published policies, or specific statements creating a VALID EXPECTATION (para. 71). Mere administrative SETUP tasks are never compliance obligations (para. 72).
"Distinct" – a two-part test (para. 73)
Capable of being distinct – the recipient can benefit from it alone or with readily available resources Separately identifiable – the promise isn't so integrated, customized, or interdependent with other promises that it's really part of a combined output
If NOT distinct → combine with other promises until a distinct BUNDLE emerges – potentially resulting in the WHOLE arrangement being one single compliance obligation (para. 77).
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Satisfaction of Compliance Obligations – Over Time vs Point in Time (paras. 87–97)
The over-time criteria – any ONE qualifies (para. 92, 95)
The recipient SIMULTANEOUSLY receives and consumes benefits AS the entity performs The performance CREATES OR ENHANCES an asset the recipient controls as it's built The entity has an ENFORCEABLE RIGHT to payment for performance completed TO DATE – even if not a fixed amount, it must at minimum compensate for work done if terminated for reasons other than the entity's own non-performance
Failing all three → satisfied at a POINT IN TIME instead, using the ordinary control-transfer test (para. 94).
The recognition mechanics once satisfaction occurs
Recognize revenue for satisfied obligations, and a liability for unsatisfied ones, from the SAME inflow – reduce the liability by an equal amount as satisfaction occurs (paras. 87–88)
Control includes the ability to use the resource for internal training, production, enhancing other assets, settling liabilities, selling/exchanging, pledging, or simply holding it (para. 90) – a deliberately broad list reflecting non-commercial public sector uses.
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Initial Recognition & Onerous Binding Arrangements (paras. 78–79)
Nothing recognized until someone performs – unless it's onerous
A WHOLLY UNSATISFIED arrangement → no asset, liability, or revenue recognized, UNLESS onerous
Recognition begins once EITHER party starts satisfying its obligations (para. 78). Where the arrangement becomes ONEROUS – the unavoidable costs of meeting the obligations exceed the economic benefits expected – the expected deficit is accounted for under IPSAS 19's provisions framework, not this Standard (para. 79).
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Determining the Transaction Consideration (paras. 109–112)
The amount the entity expects to be ENTITLED to
Excludes amounts collected on behalf of THIRD PARTIES (e.g. some sales taxes) (para. 109). CREDIT RISK is never factored in here – receivable impairment is a separate IPSAS 41 matter (para. 110). Determined assuming the arrangement proceeds as written, without cancellation/renewal/modification (para. 112).
Five factors to weigh (para. 111)
VARIABLE consideration (§12) CONSTRAINING estimates of variable consideration (§12) A significant FINANCING COMPONENT, if present NON-CASH consideration Consideration PAYABLE to a resource provider
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Variable Consideration & Constraining Estimates (paras. 113–121)
Two estimation methods, and what makes consideration variable
Discounts, rebates, refunds, credits, price concessions, incentives, bonuses, penalties – or contingency on a future event (paras. 114–115) IMPLICIT price concessions count too – customary practice, published policy, or the entity's own intention when entering the arrangement (para. 115)
EXPECTED VALUE (probability-weighted sum, for many similar arrangements) OR MOST LIKELY AMOUNT (for a binary or near-binary outcome) – whichever better predicts the entitled amount (para. 116)
Constraining the estimate – avoiding overstatement
An estimate of variable consideration is included ONLY to the extent HIGHLY PROBABLE that a SIGNIFICANT revenue reversal won't occur once the uncertainty resolves (paras. 119–121) – directly mirroring IFRS 15's own constraint mechanic, adapted for the public sector's often politically/socially driven variability sources (e.g. fee waivers, means-tested reductions).
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Allocating the Transaction Consideration to Compliance Obligations (paras. 133–140)
Relative stand-alone value – the default allocation basis
Allocate to each compliance obligation IN PROPORTION to its STAND-ALONE VALUE at inception
Best evidence: the OBSERVABLE price when sold/used separately in similar circumstances. A stated/list price is NOT automatically presumed to be the stand-alone value (para. 137). Not needed at all where there's only ONE compliance obligation (para. 135).
Estimating when not directly observable
Estimate using ALL reasonably available information – entity-specific factors, resource-provider/class information, and market conditions – maximizing OBSERVABLE inputs and applying methods CONSISTENTLY (para. 138). Special allocation rules apply for DISCOUNTS (Application Guidance) and VARIABLE amounts within a single compliance obligation (paras. 141–143).
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Capital Transfers (paras. AG140–AG142)
Grant funding to build an asset – the binding-arrangement path applies
A capital transfer arises from a binding arrangement where a resource provider gives cash/another asset SPECIFICALLY to fund the entity acquiring or constructing a non-financial asset it will control – a capital transfer ALWAYS imposes at least one compliance obligation.
Revenue recognized as the entity SATISFIES its compliance obligations, applying the same §9 mechanics Separately assess whether the inflow meets the ASSET definition, and whether the compliance obligation meets the LIABILITY definition The liability's carrying amount is REDUCED as revenue is recognized A SEPARATE compliance obligation may exist for OPERATING the constructed/acquired asset (e.g. ongoing service delivery conditions) – assessed independently of the capital-transfer element itself
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Services In-Kind, Pledges & Advance Receipts (paras. AG143–AG151)
Services in-kind – optional, immediately consumed
An entity MAY, but is not required to, recognize services in-kind as revenue and an asset – technical assistance, community-service offenders, hospital/school volunteers, volunteer firefighters. These are typically IMMEDIATELY consumed, so an equal-value expense (or construction cost, if building an asset) offsets the revenue. Uncertainty over control and reliable measurement is WHY recognition stays optional – disclosure is STRONGLY encouraged instead (paras. AG143–AG148).
Pledges – never assets – and advance receipts
Pledges are UNENFORCEABLE promises – never recognized as an asset or revenue, though they may warrant IPSAS 19 contingent-asset disclosure. If later actually transferred, recognized as a gift/donation at that point (para. AG150).
Resources received BEFORE a transfer arrangement becomes binding → recognized as an asset (if criteria met) PLUS an advance-receipt LIABILITY, extinguished as compliance obligations are later satisfied once the arrangement becomes binding (para. AG151).
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Disclosure Requirements (paras. 167–171)
Core disclosures – face or notes (para. 169)
Revenue by major class: TAXES, other compulsory contributions/levies, TRANSFERS, and compliance obligations in binding arrangements – each SEPARATELY Receivables recognized at the reporting date Liabilities for transferred-asset compliance obligations, and concessionary-loan-related liabilities Advance receipts – existence and amounts Liabilities FORGIVEN
Notes-only disclosures, and the distinctive "compelled transaction" package
Accounting policies; significant judgments; measurement basis by major revenue class (para. 170) Nature of taxes/levies the entity CANNOT reliably measure during the taxable-event period Nature/type of major bequest/gift/donation classes, goods-in-kind separately; services-in-kind qualitative/quantitative info
A genuinely distinctive package (para. 171): where the entity is COMPELLED (by legislation, constitutional authority, or policy) to satisfy an obligation regardless of the counterparty's ability/intention to pay – disclose the compelling legislation/policy, revenue recognized after applying paras. 25/105/115, and amounts NOT recognized due to collection being improbable or an implicit price concession.
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Effective Date & Amendment Timeline (paras. 194–195)
Amendment history at a glance
Base Standard: periods beginning on/after 1 January 2026 – one of the very newest Standards in the entire Handbook.
EffectiveChange
1 Jan 2027New paras. 203A, AG153A–AG153B, AG202A–AG202J; amended AG1, AG154 – Concessionary Leases and Other Arrangements Conveying Rights over Assets (Oct 2024) – requires SIMULTANEOUS adoption of IPSAS 43, 45, 46, and 48
This Standard replaces IPSAS 9 and IPSAS 23 going forward – both remain in the Handbook (and in this library) as the prior framework, applicable until an entity transitions.
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Relationship to IAS/IFRS – Comparison with IFRS 15
Comparison – IPSAS 47 vs IFRS 15
The binding arrangement accounting requirements are drawn primarily from IFRS 15 (issued 2014, amendments to March 2018), Revenue from Contracts with Customers.
TopicDifference
Overall scopeIPSAS 47 covers ALL public sector revenue, with or without binding arrangements; IFRS 15 covers only a SUBSET – contracts to deliver goods/services to customers
Binding arrangement determinationIPSAS 47 EXPLICITLY requires determining whether a binding arrangement exists; IFRS 15 has no equivalent explicit step
Unit of account terminology"Compliance obligation" (IPSAS 47) – BROADER than "performance obligation" (IFRS 15), since it covers promises to use resources INTERNALLY, not just transfers to a customer
Government grantsIAS 20 (Government Grants) has NO IPSAS equivalent – IPSAS 47 covers capital transfers and other binding-arrangement transfers directly within its own compliance-obligation framework instead (§14)
Compelled-transaction disclosureIPSAS 47 REQUIRES it (§16); IFRS 15 has no equivalent
Terminology"Compliance obligation," "resource provider," "stand-alone value," "economic substance" (IPSAS 47) vs "performance obligation," "customer," "stand-alone selling price," "commercial substance" (IFRS 15)
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Statement / Process Mapping
The master decision map
- Is there a BINDING ARRANGEMENT? No → §4/§5 (asset/liability test, taxes). Yes → continue (§3)
- Does the arrangement meet ALL FIVE gate criteria (§6)? If not → recognize only on full satisfaction with non-refundable consideration, or termination
- Should this arrangement be COMBINED with others, or does it need MODIFICATION treatment? (§7)
- Identify each COMPLIANCE OBLIGATION – distinct goods/services, or a series with the same pattern (§8)
- For each: satisfied OVER TIME (simultaneous consumption, asset creation control, or enforceable payment right) or AT A POINT IN TIME? (§9)
- Determine the TRANSACTION CONSIDERATION – fixed + variable (constrained), financing component, non-cash (§11, §12)
- ALLOCATE consideration across compliance obligations by relative stand-alone value (§13)
- Recognize revenue as (or when) each obligation is satisfied, reducing any liability by the same amount (§9)
Concept-to-statement mapping table
IPSAS 47 conceptStatement(s)Notes
Tax/transfer/compliance obligation revenueSOFPerfGross, by major class
Liability for unsatisfied compliance obligationsSOFPReduced as revenue is recognized
Advance receiptsSOFPAsset AND liability until the binding arrangement forms
Onerous binding arrangement provisionSOFPPer IPSAS 19, not this Standard directly
Services in-kind (if elected)SOFP SOFPerfEqual asset and expense/construction cost
Major class breakdown, judgments, compelled transactionsNotesMandatory disclosures, paras. 169–171
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Related Standards – Cross-Reference Map
How IPSAS 47 connects across the IPSAS body of literature
StandardNature of the connection
IPSAS 9 / 23The two predecessor Standards this one eventually replaces – both remain applicable until an entity transitions
IPSAS 19Governs onerous binding arrangement provisions and contingent asset disclosure for pledges (§10, §15)
IPSAS 20Related party pricing evidence relevant to stand-alone value estimation (§13)
IPSAS 32Grantor "other revenue" from service concession arrangements is governed here, not IPSAS 32 itself
IPSAS 41Receivable subsequent measurement and impairment (credit risk explicitly excluded from consideration determination) (§4, §11)
IPSAS 43Determines whether a sale-and-leaseback transfer is a genuine sale; simultaneous adoption for the 2024 amendments (§17)
IPSAS 45Determines transaction consideration on PP&E disposal/derecognition
IPSAS 46Current value measurement of non-cash consideration; fair value methodology throughout
IPSAS 48The mirror-image Standard governing TRANSFER EXPENSES from the giving entity's perspective
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Quick-Reference Glossary
Binding arrangement
An arrangement conferring both rights and obligations, enforceable through legal or equivalent means.
Compliance obligation
A promise to use resources internally for, or transfer, distinct goods or services.
Stand-alone value
The price of a good or service required to be used internally or provided separately.
Capital transfer
An inflow from a binding arrangement specifying the entity will acquire or construct a controlled non-financial asset.
Third-party beneficiary
An entity, household, or individual benefiting from a transaction between other parties.
Pledges
Unenforceable promises to transfer assets – never recognized as an asset or revenue.
Financial statement key
SOFP Statement of financial position
SOFPerf Statement of financial performance
Notes Notes to the financial statements