Alert: IASB Releases New IFRS 15 Revenue from Contracts with Customers

Category: IFRS

Alert: IASB Releases New IFRS 15 Revenue from Contracts with Customers

On May 28 2014, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) jointly issued a converged Standard on the recognition of revenue from contracts with customers.

International Financial Reporting Standard (IFRS) 15 Revenue from Contracts with Customers specifies how and when entities reporting under IFRS will recognise revenue, as well as requiring more detailed and relevant disclosures. The Standard provides a single, principles based five-step model and applies to all contracts with customers, with certain exceptions. This five-step model entails:

  • Identifying the contract(s) with a customer.
  • Identifying the performance obligations in the contract.
  • Determining the transaction price.
  • Allocating the transaction price to the performance obligations in the contract.
  • Recognizing revenue when (or as) the entity satisfies a performance obligation.

IFRS 15 replaces the following standards and interpretations and is effective for annual reporting periods beginning on or after January 1, 2017, with early application permitted:

  • IAS 11 Construction Contracts
  • IAS 18 Revenue
  • IFRIC 13 Customer Loyalty Programmes
  • IFRIC 15 Agreements for the Construction of Real Estate
  • IFRIC 18 Transfers of Assets from Customers
  • SIC-31 Revenue – Barter Transactions Involving Advertising Services

This communication contains a general overview of the topic and is current as of May 28, 2014. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2014. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.