SUMMARY OF IFRS 15- REVENUE FROM CONTRACT WITH CUSTOMERS

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  • B
    Blessing 3 years ago

    IFRS 15- Revenue from Contracts with Customers is one of the recent standards which was implemented by International Financial Reporting Standards.

    It replaces IAS 18 (Revenue) and IAS 11 (Construction contract).

    The objective of IFRS 15 is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer.

    The five-step model framework

    The core principle of IFRS 15 is that an entity will recognize revenue to reflect the transfer of goods or services, measured as the amount to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five-step model framework:

     Identify the contract(s) with a customer

     Identify the performance obligations in the contract

     Determine the transaction price

     Allocate the transaction price to the performance obligations in the contract

     Recognize revenue when (or as) the entity satisfies a performance obligation.

    Presentation in financial statements

    Contracts with customers will be presented in an entity’s statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity’s performance and the customer’s payment.

    Disclosures

    According to the objective of IFRS 15, an entity is expected to disclose qualitative and quantitative information about the following:

     It contracts with customers.

     The significant judgments, and changes in the judgments, made in applying the guidance to those contracts.

     Any assets recognized from the costs to obtain or fulfill a contract with a customer.

     

    Source: Deloitte

  • T
    TY 3 years ago

    Thanks for sharing 

  • B
    Bunmi Mercy 3 years ago

    Thank you for sharing. 

  • B
    Blessing 3 years ago

    You are welcome

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