SCOPE IFRS 15 applies to all contracts with customers, except the … IFRS 15: Revenue recognition from contracts with customers - Major changes in the offing for some industries A new Standard, laying down revised guidance for recognising revenue from contracts with IFRS 15 – Revenue from Contracts with Customers Presented by Vijay Kumar Council Member Institute of Chartered Accountants of India This material has been reproduced in the language and form as it was provided. applying IFRS 15 ‘Revenuefrom Contracts with Customers’in its second year following adoption. contract revenue when it is probable that the change order will be approved by the customer and the amount of revenue can be reliably measured. About IFRS 15. International Financial Reporting Standard (IFRS) 15: Revenue from Contracts with Customers was introduced by the International Accounting Standards Board to provide one comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across … Page 3 Revenue from contracts with customers IFRS 15: the new revenue standard Overview and transition The Boards issued a new revenue recognition standard on 28 May 2014. MEETING THIS OBJECTIVE This standard replaces the majority of existing IFRS and US GAAP requirements on revenue recognition. TRANSITIONAL PROVISIONS The transitional requirements, set out in Appendix C of the standard, define the term ‘date of initial application’, which is the start of the reporting period in which an entity first applies IFRS 15. The actual impact on each company’s top line will Paragraphs in bold type state the main principles. IFRS 15 has been endorsed by the EU. In May 2014, IFRS 15 (International Financial Reporting Standards) Revenue from Contracts with Customers was issued. Updated September 2019 A closer look at IFRS 15, the revenue recognition standard 2 Overview The largely converged revenue standards, IFRS 15 Revenue from Contracts with Customers and Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers1 (together with IFRS 15, the standards), … In particular, we focused on those matters which gave greatest cause for concern in our 2019 review, the findings from which we published in October. In this review, we assessed the comprehensiveness and quality of revenue IFRS 15 replaces IAS 18 and IAS 11, which currently provide separate revenue recognition guidance for goods and services and for construction contracts. It established a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The IASB published the new IFRS 15 Revenue from contracts with customer’s standard, in order to create a single model for revenue recognition for contracts. IFRS 15 will promote greater consistency and comparability across industries and capital markets. Companies using IFRS must implement IFRS 15 Revenue from Contracts with Customers for reporting periods beginning on or after 1 January 2018. Sri Lanka Accounting StandardSLFRS 15 Revenue from Contracts with Customers (SLFRS 15) is set out in paragraphs 1 –129 and AppendicesA C. All the paragraphs haveequal authority. US GAAP also includes detailed revenue and cost guidance on the accounting for unpriced change orders (or those in which the work to be performed is defined, but the price is not). The objective of IFRS 15 is to establish the principles that an entity should apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The views expressed are those of the author and do not necessarily reflect the views of UNCTAD. Terms defined in Appendix A are in italics the first time that they appear inthe … 6 IFRS IN PRACTICE 2019 fi IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS TRANSITION 2. Snapshot –IFRS 15 –Revenue from Contracts with Customers OBJECTIVE To establish principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. Will promote greater consistency and comparability across industries and capital markets from Contracts Customers... 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