The IASB has issued amendments to the Revenue Standard, IFRS 15 Revenue from Contracts with Customers, clarifying some requirements and providing additional transitional relief for companies that are implementing the new Standard.
The amendments to the Revenue Standard, which was issued in 2014, do not change the underlying principles of the Standard but clarify how those principles should be applied. They arise as a result of discussions of the Transition Resource Group (TRG). The TRG was set up jointly by the IASB and the FASB to assist companies with implementing the new Standard.
The amendments clarify how to:
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identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract;
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determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the good or service to be provided); and
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determine whether the revenue from granting a licence should be recognised at a point in time or over time.
In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a company when it first applies the new Standard.
The amendments have the same effective date as the Standard: 1 January 2018.
Full press release
© IASB - International Accounting Standards Board
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