Post-implementation Review of IFRS 15

Date recorded:

Project plan (Agenda Paper 6)

In November 2021, the IASB decided to begin the PIR of IFRS 15 in the second half of 2022.

The PIR process consists of two phases:

  • Phase 1: the IASB identifies matters to be examined, drawing on discussions with the IFRS Interpretations Committee, the IASB’s advisory groups and other interested parties. The IASB consults publicly on the matters identified in the first phase of the PIR
  • Phase 2: the IASB considers the comments from the public consultation along with the information it has gathered from any additional analysis and other consultative activities.

This paper set out a plan for Phase 1.

For the PIR of IFRS 15 the IASB will consider whether:

  • There are fundamental questions (i.e. ‘fatal flaws’) about the clarity and suitability of the core principle and the five-step revenue recognition model in IFRS 15
  • The benefits to users of financial statements of the information arising from applying the IFRS 15 requirements are broadly as expected (or whether, for example, there is significant diversity in application)
  • The costs of applying some or all of the IFRS 15 requirements and auditing and enforcing their application are broadly as expected (or whether there is a significant market development since IFRS 15 was issued for which it is costly to apply its requirements consistently).

This objective will determine the questions to discuss with stakeholders in Phase 1 outreach. The objective will also provide the IASB with a framework to analyse feedback for the purpose of determining the scope of the request for information.

Based on previous PIRs and considering the due process for PIRs, the staff expect the PIR will take around 18‒24 months to complete. The anticipated timeline for phase 1 of the PIR can be summarised as follows:

  • Phase 1 outreach—October 2022 to Q1 2023
  • Publication of the Request for Information (RFI)—H1 2023
  • Comment period for the RFI—120 days (subject to future IASB discussion)

The IASB was not asked to make any decisions at this meeting.

IASB discussion

IASB members said that this is a highly anticipated PIR and in order to ask the right questions in the RFI, constituents are urged to input even before the RFI is published, for example via their Accounting Standards Advisory Forum (ASAF) member. It was important to hear from all jurisdictions and all business sectors as this Standard is very wide-reaching.

It was noted that the Standard is substantially converged with US GAAP. One IASB member highlighted that the IASB, the US Financial Accounting Standards Board (FASB) and The Accounting Review (TAR) are hosting a joint conference entitled 'Accounting for an Ever-Changing World' early November. Given the Standard is largely converged, the conference papers on revenue may be of particular interest to the staff to gather evidence.

One IASB member requested to add a question in the RFI with regard to internal control processes. The staff confirmed that they would look into ways to incorporate this.

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