Just a bit of insight here, as this is sorta my dayjob.Company...

Just a bit of insight here, as this is sorta my dayjob.

Company must use IFRS15 when determining the timing of revenue. There's minor wiggle room for interpretation, but really, it all comes down to the IFRS (International Financial Reporting Standard). Auditors will confirm your application of revenue as it relates to the standards, and make sure your timing is correct.

When you get to record revenue depends on what it is. We have two major parts here: Initial sale of merchandise, and ongoing maintenance (can include software/firmware updates, support, etc). Initial sale must be recognised on delivery, and ongoing maintenance must be recognised over the life of the contract.

So you bill the revenue and one side goes to debtors/cash, and the other side goes to deferred revenue. When you deliver the goods, you get to recognise the initial sale of goods as revenue. Maintenance will generally run on a subscription-like period. So if it's a 3 year maintenance, it'll have specific dates that you have the maintenance for, and you'll record 1/36th of the revenue in each month until it hits zero. At which point you'll generally try to contract them to for further maintenance.

Once something is billed, it's pretty uncommon for it to be reversed. If it's in deferred revenue, it'll eventually be revenue, it's just a matter of what periods the revenue relates to. So when Bell Potter are talking about $73.5m cash receipts being more relevant to your revenue pipeline than the $11m you got to recognise this year, they're right. It's contracted, billed and paid by the customer. You just don't get to recognise it yet.

RE: "Orders pending provision" - nah, that isn't how the accounting works. They haven't booked the revenue yet, but they haven't booked the costs yet either. That's correct. But deferred revenue is actually the liability. You've received cash for something you haven't done yet, so you either earn it, or you give the money back (hence liability). Either way you owe someone something. If you're looking for the opposite of that, it's called an accrued expense (it's an accrual, not a provision), and it occurs when you earn revenue, but haven't been invoiced for costs yet. Simplified, if you earn 20% of the revenue, you should book 20% of the costs. Here, we've deferred the revenue. We haven't earned it yet. So we have low revenue, which means we shouldn't accrue the costs.

Hope that makes sense. It's convoluted, but I guess my point is, from a "does this sound right" idea, yeah, to me, it does.