IASB proposes clarifications to IFRS 15

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Jul 30, 2015

On July 30, 2015, the International Accounting Standards Board (IASB) published an Exposure Draft (ED/2015/6) with proposed clarifications of IFRS 15 "Revenue from Contracts with Customers". Comments are requested by October 28, 2015.

The Exposure Draft proposes to clarify:

  • how to identify the performance obligations in a contract;
  • how to determine whether a party involved in a transaction is the principal (responsible for providing the goods or services) or the agent (responsible for arranging for the goods or services to be provided to the customer); and
  • how to determine whether a licence provides the customer with a right to access or a right to use the entity’s intellectual property.

In addition, the IASB proposes two reliefs to aid the transition to the new revenue Standard.

  • An entity may use hindsight in identifying the satisfied and unsatisfied performance obligations in a contract that has been modified before the beginning of the earliest period presented and in determining the transaction price.
  • An entity electing to use the full retrospective method does not have not to apply IFRS 15 retrospectively to completed contracts at the beginning of the earliest period presented.

The consultation is open for comment until October 28, 2015. The IASB expects to complete its discussions on these issues by the end of 2015, after which the final amendments to the Standard will be issued.

Read the press release and the exposure draft on the IASB's Web site.

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