Malaysian Financial Reporting Standard (MFRS) 15: Revenue from Contracts with Customers was introduced by the Malaysian Accounting Standards Board to provide one comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets.
The new rules on revenue recognition became effective from 1 January 2018 and it replaces most revenue recognition standards. For many companies the impact will be manageable. But for those with large numbers of customer contracts, diverse or constantly changing terms, the impact could be significant unless action has been taken to mitigate the impact of MFRS 15.
Here's what you need to know:
The core principle of MFRS 15 is that revenue is recognised when the goods or services are transferred to the customer, at the transaction price. Revenue is recognised in accordance with that core principle by applying a 5-step model as shown below.
For more info, read our PwC Alert Issue 121: Are you ready for MFRS 15.
PwC is already working with a number of large companies around the world to manage their transition to the new standard. Talk to us to find out how we can help you address your challenges.