IFRS 15 – Problems with principals

IFRS 15 – Problems with principals

Our IFRS Newsletter: Revenue brings you the latest on the new revenue standard, IFRS 15.

KPMG IFRS revenue topic image: colourful wicker baskets hanging on a market stall

We examine the latest developments on IFRS 15, and what the decisions could mean for you.

The principal-agent guidance in the new revenue standard was the main focus of the March meeting between the IASB and the FASB. 

The Boards discussed proposed improvements, but decided that further research was needed before firm decisions could be taken. 

However, changes were agreed in a number of other areas.

For a detailed discussion of these developments, read Issue 13 of our IFRS Newsletter: Revenue.

More changes to the new standard

Collectibility, non-cash consideration and transition were all the subject of proposed changes. 

It was the second time in two months that the Boards have agreed to propose changes to the new standard.

The FASB also agreed a new practical expedient permitting a company to present sales taxes net.


 “Once again, the FASB has shown a greater appetite to make detailed changes to the new revenue standard than the IASB.”


March decisions at a glance

The proposed changes will be released for public comment. The Boards may also consider additional changes at future meetings. 

They plan to discuss the effective date of the new standard in Q2 2015.

What’s the issue?

IASB decisions

FASB decisions

Principal-agent considerations

How should a company assess whether it is a principal or an agent?

Conduct further research into principal-agent issues, with a view to clarifying how to apply the control principle.

Presentation of sales taxes

How should a company present sales taxes?

No action to be taken.

Add a practical expedient under which a company can elect an accounting policy to present sales taxes net.

Collectibility considerations

How should a company assess collectibility when determining whether a contract exists?

Conduct further research.

Amend the new standard to clarify how to assess collectibility and the meaning of contract termination.

Non-cash consideration

What is the measurement date for non-cash consideration?

No action to be taken.

Clarify that the fair value of non-cash consideration is measured at the contract inception date.

How is the variable consideration guidance applied to contracts that include non-cash consideration?

No action to be taken.

Clarify that the variable consideration guidance only applies to variability resulting from factors other than the form of the consideration.

Transition to the new standard

Should further practical expedients be added to the transition options?

Add a practical expedient for contracts that are modified before the date of initial application.

Permit companies not to apply the new standard to contracts completed under legacy GAAP when applying the new standard retrospectively.

No action to be taken.

No action to be taken – exemption already exists under IFRS.

Exempt companies from certain disclosures in the year of adoption of the new standard.

Visit our IFRS Newsletters page for access to all our latest newsletters on the new revenue standard and other major IFRS topics.

For KPMG’s most recent publications on the new standard, visit our IFRS – Revenue hot topics page.

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