IASB Proposes to Defer Effective Date of IFRS 15
The proposed amended effective date is annual periods beginning on or after January 1, 2018. In addition, the IASB will provide some clarification and illustrative examples to assist with implementation. With this amendment, entities will still be able to adopt the standard early and will also still have the option to apply it either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the initial impact recognized at the date of the initial application.
The objective of IFRS 15 is to provide principles to specify when and how an entity should recognize revenue and for reporting entities to expand disclosures to provide the users of the financial statements with more useful information.
The five step model presented in IFRS 15 includes the following:
- Identify the contract(s) with the customer
- Identify the performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price
- Recognize revenue when the performance obligation is satisfied
Even though the effective date might be delayed a year, it is important for entities to start assessing the impact of IFRS 15 because for some entities the change might be significant.
If you have any questions, please contact your WithumSmith+Brown professional, a member of WS+B’s International Services Group or email us at [email protected].
To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
