Publications on implementing IFRS 15

The Financial Reporting Council (FRC) continues to raise queries in relation to revenue recognition policies and related disclosures.  Its Annual Review of Corporate Reporting and previously issued IFRS 15 thematic review identify the most common areas of challenge and set out the FRC's expectations for high-quality reporting, highlighting those areas where improvements to reporting quality are still needed.  These include:

  • Accounting policies which should be provided for all significant performance obligations and should address the timing of revenue recognition (whether over time or at a point in time), exactly when revenue is recognised for 'point in time' performance obligations, the basis for recognising revenue over time and the methodology applied to assess the extent to which 'over time' performance obligations have been satisfied.  
  • Disclosures with respect to variable consideration including explanations as to the nature of variable consideration and how it is estimated and, where necessary, constrained using either the 'expected value' or 'most likely amount' method.  The FRC highlights that disclosures that refer to a significant risk of a downward adjustment to revenue may suggest that the constraint may not have been appropriately applied.
  • Disclosures of the significant judgements made in applying the standard including those in relation to the allocation of the transaction price, the timing of satisfaction of performance obligations and whether an entity is principal or agent.
  • Disclosures of contract balances such as the nature of the balance and significant changes.

The FRC will continue to challenge companies whose disclosures fail to match its expectations.

Related Publications

Implementing IFRS 15 'Revenue from Contracts with Customers' - A practical guide to implementation issues for the asset management sector

16 Oct 2017

This guide is intended to provide an overview of applying IFRS 15 within the asset management sector. The guidance provided here is not intended to be exhaustive, but aims to highlight some of the potential issues to consider and to indicate how those issues might be approached.

Implementing IFRS 15 'Revenue from Contracts with Customers' - A practical guide to implementation issues for the travel, hospitality and leisure sector

31 Mar 2015

This guide is intended to provide an overview of applying IFRS 15 within the travel, hospitality and leisure sector. The guidance provided here is not intended to be exhaustive, but aims to highlight some of the potential issues to consider and to indicate how those issues might be approached.

Implementing IFRS 15 'Revenue from Contracts with Customers' - A practical guide to implementation issues for the aerospace and defence industry

31 Mar 2015

This guide is intended to provide an overview of applying IFRS 15 within the aerospace and defence industry. The guidance provided here is not intended to be exhaustive, but aims to highlight some of the potential issues to consider and to indicate how those issues might be approached.

Implementing IFRS 15 'Revenue from Contracts with Customers' - A practical guide to implementation issues for the industrial products and services sector

09 Mar 2015

This guide is intended to provide an overview of applying IFRS 15 within the industrial products and services sector. The guidance provided here is not intended to be exhaustive, but aims to highlight some of the potential issues to consider and to indicate how those issues might be approached.

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