Revenue resources

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.  

This page includes all of our resources on IFRS 15.  It includes links to:

Latest IFRS 15 Resources

Joint webcast on revenue recognition

29 May 2014

On 5 June 2014, the IASB and FASB will hold a joint webcast on the boards’ final standard on revenue from contracts with customers.

The Bruce Column — Recognising the achievement

28 May 2014

The new revenue recognition standard has been a long time in gestation. Now that it is published Robert Bruce, our regular resident columnist assesses its impact and effects.

Need to know — IASB issues new standard on revenue recognition

28 May 2014

This newsletter discusses the IASB's new Standard, IFRS 15 Revenue from Contracts with Customers. It summarises the final standard’s (1) key provisions, including the specific steps for recognising revenue; (2) other provisions and impacts; (3) disclosure requirements; and (4) effective date and transition.

Robert Bruce interviews — IFRS 15 'Revenue from Contracts with Customers'

28 May 2014

In this interview, Robert speaks with Phil Barden, Leader of Deloitte Expert Advisory Panel on Revenue Recognition, Panos Kakoullis, Head of Audit of Deloitte UK, William Touche, a Senior Partner of Deloitte UK’s Technology Group, and Mark Beddy, a Senior Partner of Deloitte UK's Real Estate Group. They discuss the background to the new standard on revenue recognition and the impacts it may have on revenue recognition, particularly in the telecommunications, software and real estate sectors.

IASB and FASB issue new, converged revenue standards

28 May 2014

The International Accounting Standard Board (IASB) has today published its new revenue Standard, IFRS 15 'Revenue from Contracts with Customers'. At the same time, the US-based Financial Accounting Standards Board (FASB) has published its equivalent revenue standard, ASU 2014-09 'Revenue from Contracts with Customers' (Topic 606).The standards are the result of a convergence project between the two Boards. IFRS 15 specifies how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard supersedes IAS 18 'Revenue', IAS 11 'Construction Contracts' and a number of revenue-related interpretations. Application of the standard is mandatory for all IFRS reporters and it applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts.

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.