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New revenue standard – Introducing the new IFRS 15

New revenue standard – Introducing the new IFRS 15

Insight and analysis on IFRS 15 Revenue from Contracts with Customers.


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It’s time to engage with the new revenue standard.

Now that the IASB has issued its clarifications to IFRS 15, we have the final version of the standard that you will be required to apply by 2018.

What's in the new IFRS 15?

The final standard includes clarifications and further examples on how to apply certain aspects of the five-step recognition model, as well as additional practical expedients to apply on transition.

Almost all companies are affected by IFRS 15, but if you are in the telecom, software, engineering, construction or real estate industries, then you are likely to see more significant changes.


“If you haven’t yet engaged with IFRS 15, then it’s time to assess the extent of the impact, so that you can address the wider business implications – and meet the expectations of your stakeholders and regulators.”

Brian O’Donovan,

KPMG’s global IFRS revenue recognition deputy leader


Our First Impressions publication has been fully revised and updated to provide a digestible introduction to the clarified version of IFRS 15. The second edition of our Issues In-Depth guide gives our detailed analysis.

IFRS 15: Key facts

  • A five-step model is applied to determine when to recognise revenue, and at what amount.
  • Revenue is recognised when (or as) a company transfers control of goods or services to a customer at the amount to which the company expects to be entitled.
  • Depending on whether certain criteria are met, revenue is recognised either over time, in a manner that best reflects the company’s performance, or at a point in time, when control of the goods or services is transferred to the customer.

The impacts may be felt right across your organisation

The new standard may have a significant impact on how and when you recognise revenue, with new estimates and judgements, and the possibility of revenue recognition being accelerated or deferred. Even if you find that transition will be easier for your company, you will still be subject to extensive new disclosure requirements.


“For many organisations, the new standard will have a broad impact – not just changing the amounts and timing of revenue, but requiring an overhaul of the core systems used to produce the numbers.”

Prabhakar Kalavacherla,

KPMG’s global IFRS revenue recognition leader


You need to assess the extent of the standard’s impacts so that you can address the wider business implications. Investors, analysts and other stakeholders will also want to understand the impact on your business, so you’ll need to consider how the standard affects:

  • your financial ratios, which may impact your share price or access to capital;
  • the timing of tax payments, which may impact your ability to pay dividends; and
  • staff bonuses and incentive plans.

You need to decide how to transition

The new effective date is 1 January 2018. Decisions need to be made soon on which transition approach to adopt – retrospective or cumulative effect.

Our updated publication, Transition to the new revenue standard, will be available soon to help you understand the best option for your business. In the meantime, consider which transition approach other companies in your industry might select: retrospective application is likely to be challenging despite the practical expedients available. 

And you need to engage

Companies are frequently surprised at the length and complexity of the implementation phase so it’s time to engage. If you haven’t done so already, look at your customer contracts now. It’s time for all companies to engage and meet regulator and stakeholder expectations.

Where can you learn more?

This web article is also available in print-friendly format.

Read our updated First Impressions and Accounting for revenue is changing for a digestible introduction to the clarified version of the new standard and its possible impacts for your business.

A fully revised edition of our Issues In-Depth provides our detailed analysis, pooling the insights and experience of our revenue recognition teams globally to guide you through the requirements of the new standard.

It illustrates the main points with industry-specific examples and explains our emerging thinking on key interpretative issues.

It also addresses the question ‘how does this compare with my current accounting?' by including comparisons with current IFRS and US GAAP requirements.

Also coming over the next few weeks are updated editions of our:

  • Transition to the new revenue standard publication to help you understand the best option for your business; and
  • series of industry-specific publications, looking at what the new standard could mean for a range of different sectors.

You may also find our Guide to annual financial statements – IFRS 15 supplement helpful.

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