10 November 2015

EFRAG: Comment letter on the IASB's ED/2015/6 Clarifications to IFRS 15

EFRAG has issued its comment letter on the IASB's ED Clarifications to IFRS 15 Revenue from Contracts with Customers. EFRAG supports the IASB’s efforts to clarify IFRS 15 to help reduce potential diversity in practice that might arise upon the adoption of the Standard.

On 30 July 2015, the IASB issued the Exposure Draft ED/2015/6 Clarifications to IFRS 15 (the ‘ED’). The purpose of the ED is to propose targeted amendments to provide clarifications with respect to:

a.     Identifying performance obligations;

b.    Principal versus agent considerations; and

c.     Licensing.

In addition the ED proposes transition relief for modified contracts and completed contracts.

EFRAG believes the converged revenue Standard is a step forward in financial reporting that will provide benefits to both preparers and users internationally. While EFRAG supports the convergence of IFRS 15 with Topic 606 Revenue from Contracts with Customers, EFRAG agrees with the IASB’s decision not to clarify certain issues where the FASB has decided to provide further guidance in the Standard. EFRAG believes that, at this stage, before the implementation of IFRS 15, the IASB should only clarify those issues that are strictly necessary for a proper understanding of IFRS 15. However, EFRAG has some concerns in relation to two illustrative examples on identifying performance obligations.

In addition, in EFRAG´s view, the IASB should make its best effort, in collaboration with the FASB, to retain the current level of convergence. In this regard, EFRAG encourages the IASB to continue to discuss emerging issues together with the FASB to provide a basis for reaching converged solutions. Where divergence arises, EFRAG supports the IASB’s decision to include a discussion in the Basis for Conclusions of the potential impacts on convergence for each of the issues where either the IASB or the FASB have decided to propose amendments to the Standard.

Press release

Full comment letter

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