IFRS 15 for airlines

IFRS 15 for airlines

The key considerations for airlines to focus on to drive their IFRS 15 implementation to the finish line.


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IFRS 15 may result in a change in accounting practice for airlines.

In a matter of months, the new revenue recognition standard – IFRS 15 – will change the way airlines account for air tickets, cargo airway bills, loyalty
points and change fees.

To help you drive your implementation project to the finish line, we’ve pulled together a list of the key considerations that you need to focus on, along with a more detailed practical guide.

How you might be affected

Airlines are likely to experience the impact of IFRS 15 in the following areas.

  • Ticket breakage revenue may be recognised earlier compared with current practice. For many airlines, this will be on the flight date but not before.
  • For loyalty programmes, the allocation of revenue between air travel and loyalty points will probably change because the residual method may no longer be available. For loyalty points sold to non-airline partners – e.g. a bank – more extensive guidance in the new standard on identifying performance obligations means that there may be other promises in a contract that need to be accounted for separately.
  • The presentation of interline cargo revenue may change for an airline, depending on whether it acts as principal or agent under the new standard. 

Other areas impacted may include accounting for change fees, travel vouchers and holiday packages.

Airlines – Getting to the finish line

Unexpected changes may also arise as the new standard is more detailed than the existing revenue requirements. Therefore, it’s essential that the accounting impacts are considered in detail, as well as the broader business impacts – e.g. the impact on tax and employee bonus schemes.

Our SlideShare IFRS 15 Revenue – Are you good to go? outlines the key
considerations that airlines need to focus on. You can also download a PDF version (298 KB).

Our IFRS 15 for Airlines – Are you good to go? application guidance provides more detailed and practical insight, using examples to illustrate how airlines might apply the new requirements.

Also available…

  • Our IFRS 15 transition toolkit page will help you understand the new requirements and decide which transition option to use – it also provides illustrative disclosures.
  • Our IFRS blog provides topical insight and discussion, and practical guidance to help you implement the new IFRS accounting standards.

Please speak to your usual KPMG contact if you would like to find out more about how KPMG can help your business.

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