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IASB publishes clarifications to IFRS 15

  • IASB document Image

Apr 12, 2016

The IASB has published final clarifications to IFRS 15, “Revenue From Contracts With Customers,” which address (1) identifying performance obligations, (2) principal-versus-agent considerations, and (3) licensing. The amendments also provide some transition relief for modified contracts and completed contracts.

Specific provisions of the amendments include the following:

  • Iden­ti­fy­ing per­for­mance oblig­a­tionsClarification that the objective of the as­sess­ment of a promise to transfer goods or services to a customer is to determine whether the nature of the promise, within the context of the contract, is to transfer each of those goods or services in­di­vid­u­ally or, instead, to transfer a combined item or items to which the promised goods or services are inputs.
  • Principal-versus-agent con­sid­er­a­tions Extension of the ap­pli­ca­tion guidance.
  • Licensing — Clarification of when an entity’s ac­tiv­i­ties sig­nif­i­cantly affect in­tel­lec­tual property.
  • Tran­si­tion relief — Two ad­di­tional (optional) practical ex­pe­di­ents.

The amendments are effective for annual reporting periods beginning on or after January 1, 2018, which is the same effective date as that of IFRS 15. Earlier application is permitted.

Editor’s Note: The FASB has decided to publish more extensive amend­ments to its revenue standard, Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. Final amend­ments to the ap­pli­ca­tion guidance on principal-versus-agent con­sid­er­a­tions were published in March 2016, and amend­ments on (1) iden­ti­fy­ing per­for­mance oblig­a­tions and licensing and (2) other narrow scope amend­ments and practical ex­pe­di­ents are expected to be published in the second quarter of 2016.

Also, while the IASB announced that it will no longer attend TRG meetings, the FASB declared in February that it will continue to address im­ple­men­ta­tion issues and has scheduled three TRG meetings for 2016.

The amendments to IFRS 15 are available on the IASB’s eIFRS Web site (subscription required). For more information, see the press release and interview with Ian Mackintosh on the IASB’s Web site. Stay tuned for Deloitte’s IFRS in Focus newsletter on this topic.

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