In May 2014, the IASB issued their long-awaited standard on revenue recognition - IFRS 15, “Revenue from Contracts with Customers”. In April 2016, the IASB issued certain clarifications and amendments to the standard, but no further changes are planned.
This new standard will supersede almost all existing IFRS revenue guidance including IAS 11 and 18. It applies to every industry and every business reporting under IFRS or US GAAP for periods beginning on or after 1 January 2018.
The new standard is designed to account for the fact that in today's world, almost all businesses are introducing innovative revenue generation models such as contracts that include a bundle of goods and services, contingent pricing arrangements, goods or services that are delivered over time, licensing agreements and other complex arrangements.
These models present a challenge to existing accounting and demand a new approach, but adopting the new rules has wide-ranging implications that go well beyond the accounting function.
Revenue underpins and impacts many crucial business and control processes, including budgeting, compensation systems, IT systems and data, controls, key performance indicators and investor metrics.
Transition to IFRS 15 provides a real opportunity to refresh, renew and enhance your revenue processes through adopting the standard. We can help you grasp the opportunity to improve as well as comply. With only a couple of years before the effective date, we can help you:
Download our in depth supplements for a comprehensive look at the new revenue model and its implications across various industries.
