EFRAG final comment letter on the request for information on the post-implementation review of IFRS 15
01 Nov, 2023
The European Financial Reporting Advisory Group (EFRAG) has published its final comment letter in response to the International Accounting Standards Board’s (IASB's) Request for Information (RFI) on the Post Implementation Review (PIR) of IFRS 15 'Revenue from Contracts with Customers'.
The final comment letter, which incorporates findings from an EFRAG-supported academic study, considers that IFRS 15 is generally working 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.
EFRAG has made suggestions for the IASB to address the above application challenges including through additional illustrative examples.
The press release, the final comment letter.
Update January 2024 - the feedback statement is available on the EFRAG website.
