This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Clarifications to IFRS 15, Revenue from Contracts with Customers: Issues Emerging from TRG discussions [Completed]

Effective date and transitional provisions:

The amendments are effective for annual reporting periods beginning on or after January 1, 2018. Earlier application is permitted.

Last updated:

May 2016

Overview

The objective of this project is to clarify the guidance in IFRS 15 in respect of issues arising from the discussions of the Transition Resource Group for Revenue Recognition (TRG). The TRG is a group of financial statement preparers, auditors and users established by the IASB and the FASB to solicit analyze and discuss stakeholder issues arising from the implementation of the new revenue standard. If applicable, the TRG informs the IASB and the FASB of which implementation issues may require further action on the part of the Boards. To date, the TRG has met several times, and a number of these issues have been brought to the attention of the Boards at their meetings. In January 2016, the IASB announced that the TRG was not scheduled to meet again while the FASB indicated that it will continue to address implementation issues and has scheduled three TRG meetings for 2016.

Deloitte has issued summaries in respect of the following TRG meetings:

Here are the amendments issued by the FASB after the initial release of IFRS 15 by the IASB:

  • Update 2015-14—Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
  • Update 2016-08—Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
  • Update 2016-10—Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
  • Update 2016-12—Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients

Other developments

May 2016

On May 18, 2016, the FASB issued a proposed Accounting Standards Update (ASU), Technical Corrections and Improvements to Update 2014-09, ‘Revenue From Contracts With Customers, which would make minor changes to the Board’s new revenue guidance. Comments on the proposed ASU are due by July 2, 2016.

On May 10, 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-12 Narrow-Scope Improvements and Practical Expedients, which amends certain aspects of the Board’s new revenue standard, ASU 2014-09 Revenue From Contracts With CustomersThe ASU’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective.

April 2016

On April 14, 2016, the FASB issued Accounting Standards Update (ASU) 2016-10 Identifying Performance Obligations and Licensing, which amends certain aspects of the Board’s new revenue standard, ASU 2014-09 Revenue From Contracts With CustomersThe ASU’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective.

On April 12, 2016, the IASB published final clarifications to IFRS 15Revenue from Contracts with Customers. The amendments are effective for annual reporting periods beginning on or after January 1, 2018 (same effective date as IFRS 15 itself). Earlier application is permitted. The amendments do not change the underlying principles of the Standard but rather clarify how the principles should be applied. The amendments clarify how to: (i) identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract; (ii) determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided); and (iii) determine whether the revenue from granting a licence should be recognized at a point in time or over time. The amendments also include additional transitional relief provisions aimed at reducing the cost and complexity for entities when they first apply the new Standard.

March 2016

On March 18, 2016, the IASB updated its Work Plan in respect of this project to note that it is currently drafting the final amendments, which it expects to issue in April 2016.

February 2016

In February 2016, the IASB staff updated the Work Plan to indicate that the final amendments are expected to be issued in March/April 2016.

January 2016

On January 21, 2016, the IASB announced that the Transition Resource Group for Revenue Recognition (TRG) is not scheduled to meet again. The IASB completed its decision making on the amendments to IFRS 15 in January. The clarifications are expected to be published in March 2016 and the effective date of the amendments will be January 1, 2018, which is also the effective date of IFRS 15. The IASB also notes that it will continue to collaborate with the FASB and will monitor any discussions that the FASB may have in the future with the US GAAP constituents of the TRG. However, the IASB also stresses that companies reporting using IFRS standards are not required to consider pronouncements or public discussions of the FASB.

September 2015

On September 11, 2015, the AcSB issued an Exposure Draft that corresponds to the IASB's Exposure Draft on this topic. Comments are requested by October 28, 2015.

July 2015

On July 30, 2015, the IASB published an Exposure Draft (ED/2015/6) with proposed clarifications of IFRS 15. Comments are requested by October 28, 2015.

On July 22, 2015, the IASB approved its proposal to defer the mandatory effective date of IFRS 15, Revenue from Contracts with Customers to January 1, 2018. Earlier application of IFRS 15 continues to be permitted.

On July 9, 2015, the FASB affirmed its proposal to defer the mandatory effective of ASU 2014-09, Revenue from Contracts with Customers by one-year. 

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.