Robert Bruce interviews – A detailed look at the new revenue framework, IFRS 15 'Revenue from Contracts with Customers'
Robert Bruce hosts an interview on some of the issues and challenges that entities may encounter when applying the IASB’s new standard, IFRS 15 Revenue from Contracts with Customers.
In this interview, Robert speaks with Phil Barden, a Partner in the Deloitte UK IFRS Centre of Excellence, and Amy Haworth, a Senior Manager in the Deloitte UK IFRS Centre of Excellence. They discuss in greater detail the core principles underpinning the IFRS 15 framework, and potential issues that certain IFRS reporters may encounter when implementing this standard. They additionally discuss certain guidance that IFRS 15 introduces of which IFRS reporters will need to be aware, such as disclosures, contract modifications and customer options to purchase additional goods and services, and transition options. (approx. 61 min)
Click above to access the video podcast or watch it on YouTube. The audio podcast can be found here. The podcast is also available for download from iTunes.
This interview has been split into individual segments for easier viewing. Click on the links below to open the videos in a new window.
- IFRS 15 Revenue from Contracts with Customers introduction
In this video, Robert, Phil and Amy discuss the background to the new standard and the potential areas of impact that IFRS reporters should be aware of, such as changes to the timing of revenue and profit, IT systems and processes, the disclosure requirements and associated data requirements. (approx. 8 min) The audio podcast can be found here. - Step 1: Identify the contract(s) with a customer
In this video, Robert, Phil and Amy discuss the criteria for identifying a contract with a customer within the scope of IFRS 15. (approx. 3 min) The audio podcast can be found here. - Step 2: Identify the performance obligations in the contract
In this video, Robert, Phil and Amy discuss the steps for identifying performance obligations. (approx. 7 min) The audio podcast can be found here. - Step 3: Determine the transaction price
In this video, Robert, Phil and Amy discuss how to determine the ‘transaction price’ and the impact of the constraint on estimates of variable consideration. They also discuss the time value of money. (approx. 9 min) The audio podcast can be found here. - Step 4: Allocate the transaction price to the performance obligations in the contract
In this video, Robert, Phil and Amy discuss the possible allocation methods available. (approx. 2 min) The audio podcast can be found here. - Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
In this video, Robert, Phil and Amy discuss the conditions for recognising revenue over time or at a point in time. (approx. 11 min) The audio podcast can be found here. - Other considerations: Disclosures
In this video, Robert and Amy discuss the new disclosure requirements. (approx. 2 min) The audio podcast can be found here. - Other considerations: Contract modifications
In this video, Robert, Phil and Amy discuss how to account for modifications to customer contracts. (approx. 5 min) The audio podcast can be found here. - Other considerations: Costs of obtaining a contract
In this video, Robert, Phil and Amy discuss the requirements for expensing or capitalising the costs of obtaining a contract. (approx. 4 min) The audio podcast can be found here. - Other considerations: Customer options for additional goods or services
In this video, Robert, Phil and Amy discuss examples where customers have the option to purchase additional goods or services and the accounting implications of this under IFRS 15. (approx. 4 min) The audio podcast can be found here. - Other considerations: Customers’ unexercised rights
In this video, Robert, Phil and Amy discuss breakage, and the accounting implications of this under IFRS 15. (approx. 3 min) The audio podcast can be found here. - Transition
In this video, Robert, Phil and Amy discuss the transition options for applying IFRS 15 for the first time. (approx. 2 min) The audio podcast can be found here.
In another video podcast in this series, Robert Bruce interviews Phil Barden, Leader of the 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. The podcast provides a high-level introduction to the standard as 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. The podcast can be found here.