IFRS 15 Revenue from Contracts with Customers provides a single, principles-based five-step model that should be applied to determine how and when to recognise revenue from contracts with customers.
Published May 2014. Effective 1 January 2018++.
++The original effective date was set for annual periods beginning on or after 1 January 2017. However, in September 2015, the IASB issued an amendment to the standard deferring the effective date by one year to 1 January 2018.
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*UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.
IFRS 15 replaces both IAS 11 and IAS 18 as well as SIC 31, IFRIC 13, IFRIC 15 and IFRIC 18 and establishes a single, comprehensive framework for revenue recognition. Its core principle is that revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.
A five-step approach to revenue recognition is required:
IFRS 15 also includes requirements for accounting for costs related to a contract with a customer. These are recognised as an asset if certain criteria are met.
The standard requires qualitative and quantitative disclosures in respect of revenue, contract balances, performance obligations, significant judgements and assets recognised from costs to obtain or fulfill a contract.
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Full access to details of the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.
To be applied to periods beginning on or after 1 January 2019. Earlier adoption is permitted.
IFRS 15 is amended to refer to IFRS 16 rather than IAS 17 and to include the depreciation of right-of-use assets as an example of costs that may relate directly to a contract.
The amendments have the same effective date as the Standard: 1 January 2018.
The amendments arise as a result of identified by the Revenue Transition Resource Group. They do not change the underlying principles of the Standard but clarify how those principles should be applied.
The amendments clarify how to:
To be applied to periods beginning on or after 1 January 2021. Earlier adoption is permitted.
IFRS 15 is amended to exclude from its scope contracts within the scope of IFRS 17. An entity may, however, choose to apply IFRS 15 to insurance contracts that have as their primary purpose the provision of services for a fixed fee.
*Not EU endorsed as at 14 December 2017. Read more on EU endorsement.
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.
The following items in FRS 101 Appendix II: Note on legal requirements have been added in order to address United Kingdom company law requirements.
The reduced disclosure framework states that a qualifying entity is exempt from many of the disclosure requirements of IFRS 15, including:
This page was last updated 14 December 2017