Read the second article in new Insights into IFRS 15 series – ‘Step 1: Identifying a contract with a customer.
Revenue recognition is fundamental in all businesses, and it is important that it is recognised in a consistent and comparable way across industries and capital markets.
IFRS 15 ‘Revenue from Contracts with Customers’ was a result of the joint International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) project to improve the financial reporting of revenue under the IFRS Accounting Standards and US GAAP (Generally Accepted Accounting Principles). The Standard makes it clear that its purpose is not to redefine the concept of revenue, but rather to ensure that revenue is consistently recognised at the appropriate time and at the most reliable amount.
Our ‘Insights into IFRS 15’ series summarises the key areas of the Standard, highlighting some areas that are challenging to apply in practice, to assist reporting entities in understanding how to apply IFRS 15’s requirements. This article focuses on the objective and scope of IFRS 15.
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IFRS 15: Step 1 - Identifying a contract with a customer