IFRS 15: revenue recognition and performance obligations - part 1

The new revenue recognition standard, IFRS 15 Revenue from Contracts with Customers, is proving to be expensive and disruptive for affected reporters. Companies need to take swift action to ensure they have comparative reporting on performance obligations in place for the effective date on 1 January 2018, reports Sarah Perrin ACA in the first of a series on IFRS 15

Can you spot a performance obligation when you see one?

Finance teams implementing new revenue recognition standard IFRS 15 need to be able to do so. And if they can’t now, they could be in trouble because time is running out.

IFRS 15 Revenue from Contracts with Customers becomes effective for accounting periods beginning on or after 1 January 2018, so the transition period has already begun for December 2017 and March 2018 year-end reporters, and will do imminently for June 2018 year-end reporters. Most companies are expected to apply IFRS 15 fully retrospectively, so they ideally want to be running parallel systems before the end of this year.

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