IFRS 15: An overview of the new principles of revenue recognition
In May 2014, the IASB published IFRS 15, Revenue from Contracts with Customers. Simultaneously, the FASB published ASU 2014-09 (Topic 606). These two broadly identical texts represent the culmination of the Boards’ work on a major joint project that has taken many years to complete.
Given the volume of innovations and clarifications introduced by IFRS 15, it is important to identify its impact as early as possible, both to prepare for the transition and to anticipate the accounting consequences on future contracts or contracts currently under negotiation.
The implementation of this converged standard may imply for companies significant work, in order:
- to identify the potential impacts on the financial statements, in terms of amount of revenue and recognition pattern,
- to adapt the IT system to the new principles for recognizing revenue,
- to analyze the contracts with customers and make them evolve so as to avoid some unfavorable accounting consequences.
Companies need undertake their IFRS 15 project as soon as possible to be ready for the 2017 mandatory application. Mazars has issued a 12-pages summary of the new principles for recognizing revenue according to IFRS 15.
This publication is available below.