IFRS 15 Revenue from Contracts with Customers

International Financial Reporting Standard 15

Overview of IFRS 15

  • Issued: in 2014; followed by clarifications
  • Effective date: 1 January 2018
  • What it does:
    • It sets the principles for reporting the information about the revenues about:
      • Nature;
      • Amount;
      • Timing;
      • Uncertainties;
    • It describes the five-step model for revenue recognition and provides guidance about each step:
      1. Identify the contract with the customer;
      2. Identify the performance obligations in the contract;
      3. Determine the transaction price;
      4. Allocate the transaction price to the performance obligations in the contracts;
      5. Recognise revenue when (or as) the entity satisfies a performance obligation.
    • It provides the guidance on contract costs
    • It contains further clarifications related to specific transactions such as sale of licences, warranties, repurchase agreements and other topics.
    • It sets the requirements for presentation and disclosures in the financial statements.

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