The International Accounting Standards Board has issued amendments to the Revenue Standard
The International Accounting Standards Board (the Board) has today 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. As reported by “The 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 Board and the US national standard-setter, the Financial Accounting Standards Board (FASB), to assist companies with implementing the new Standard.
The amendments clarify how to:
- identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract;
- 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
- determine whether the revenue from granting a licence should be recognised at a point in time or over time.The amendments have the same effective date as the Standard: 1 January 2018.
- Further information on the amendments can be found here.
- 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.
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