EFRAG draft comment letter on the request for information on the post-implementation review of IFRS 15
25 Jul, 2023
The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB's request for information seeking comments from stakeholders to identify whether the impairment requirements in IFRS 15 'Revenue from Contracts with Customers' provide information that is useful to users of financial statements; whether there are requirements that are difficult to implement and may prevent the consistent implementation of the standard; and whether unexpected costs have arisen in connection with applying or enforcing the standard.
In its draft comment letter, EFRAG notes that the requirements in IFRS 15 generally work as intended.
Nevertheless, EFRAG identifies some application challenges that should be further considered by the IASB in the context of this project. These include:
- challenges in determining whether a reporting entity is a principal or an agent;
- challenges in accounting for contracts involving licences;
- challenges of applying the requirements of IFRS 15 along with the requirements of IFRS 3, IFRS 16, IFRS 10, and IFRS 11;
- challenge of identifying performance obligations related to contracts with upfront fees, pre-production services, and those involving licences; and
- challenge in determining the transaction price in respect of the requirements for the estimation of variable consideration and the treatment of ‘negative’ revenue.
Comments on EFRAG's draft comment letter are requested by 11 October 2023. For more information, see the press release and the draft comment letter on the EFRAG website.
