International Financial Reporting Standard 15

• Issued: in 2014; followed by clarifications
• Effective date: 1 January 2018
• What it does:
  • It sets the principles for reporting the information about the revenues about:
    • Nature;
    • Amount;
    • Timing;
    • Uncertainties;
  • It describes the five-step model for revenue recognition and provides guidance about each step:
    1. Identify the contract with the customer;
    2. Identify the performance obligations in the contract;
    3. Determine the transaction price;
    4. Allocate the transaction price to the performance obligations in the contracts;
    5. Recognise revenue when (or as) the entity satisfies a performance obligation.
  • It provides the guidance on contract costs
  • It contains further clarifications related to specific transactions such as sale of licences, warranties, repurchase agreements and other topics.
  • It sets the requirements for presentation and disclosures in the financial statements.

• Summary of IFRS 15 Revenue from Contracts with Customers
• 5-step model for revenue recognition under IFRS 15 + example + journal entries + video
• IFRS 15 vs. IAS 18: Huge change is here! – this article compares the accounting under IAS 18 and IFRS 15 on a simple example.
• IFRS 15 Examples: How IFRS 15 affects your company – this article explains how certain industries (telecom, real estate and others) are affected by IFRS 15.
• Example: Construction contracts under IFRS 15 – you can learn how to account for construction contracts under IFRS 15 here (if you applied IAS 11 previously)
• Accounting for discounts under IFRS
• How to account for customer incentives under IFRS
• Principal or agent – revenue or liability?
• How to Account for Cryptocurrencies in line with IFRS – learn about accounting for cryptocurrencies and for the revenue from their “mining”.

• Are contract assets and contract liabilities monetary or non-monetary? – How to account for contracts with customers in foreign currency? – with examples
• How to account for barter transactions
• How to account for the sale of gift cards
• How to account for warranties under IFRS 15
• We rent apartments and supply utilities with rent. Are we agent or principal?
• How to account for settlement discounts under IFRS 15?
• What is the difference between contract asset and trade receivable?
• How to account for the sales of software licenses with subsequent updates?
• How to determine whether the performance obligation is distinct?
• Agent’s commission when principal fails to perform– can you still recognize commission revenue from that transaction?
• Direct sales with no contract– we have no ‘contract’. Does IFRS 15 apply in this case since there is no contract?
• Retention in construction contracts– is there a significant financing component since often these payments are retained by the clients for more than one year?
• Accounting for “buy two + get one free”– can we recognize the revenue for 2 products, expenses for the same products as costs of sales and then expenses for one product as marketing expenses?
• Revenue under different Incoterms (EXW, DAP)– does the recognition of revenue depend on the specific Incoterm?

• IFRS Kit – learn IFRS in 150+ videos, 150+ excel case studies, quizzes, certificates
• Expected Credit Loss for Accountants – highly specialized course focused on ECL under IFRS 9 with step-by-step example related to trade receivables, many practical insights included.

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