Similar to you, that is how I interpreted the statement.M7T was...

Similar to you, that is how I interpreted the statement.

M7T was just being factual in statement - stating the revenue figure likely to be recognised while at the same time noting that actual figure being recognised might be different due to revenue recognition rules.

The reason being the introduction of AASB15 from 1 January 2018 essentially sets out a five-stage model for reporting companies:

• Identify the contract with the customer
• Identify the performance obligations in the contract
• Determine the transaction price
• Allocate the transaction price to the performance obligations
• Recognise revenue when (or as) the performance obligations are satisfied.

The amount of revenue permitted to be recognised will therefore depend on how the contract is structured (using performance obligations) and how M7T has delivered against those obligations.

To have confidence in the robustness of this figure, you would in turn need to have confidence in the company's track record in project delivery, implementation, fully understanding the challenges, stress points, risks ad etc prior to negotiation over contractual terms and etc.

Further, it is important to note that there are some assumptions underpinning revenue figure likely to be recognised, for example:

• it assumes M7T successfully delivering on all the relevant performance obligations within the relevant financial year
• it does not consider potential penalties imposed if product does not deliver on what it is meant to do

Most SaaS contracts would also have provisions for add-ons, extensions (for example, extension of scope or product suite) Accordingly, there is a possibility that that the 'minimum' sold revenue can be greater.