IFRS 15 – Transition to the new revenue standard

IFRS 15 – Transition to the new revenue standard

What’s the best option for your business on transition to IFRS 15?

Prabhakar Kalavacherla


KPMG in the U.S.


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Choosing a transition option may not be straightforward.

As the effective date of IFRS 15 is fast approaching, one key decision needs to be made soon – how and when to transition to the new standard.

Identifying the optimal approach depends on a range of issues, so the answer may not be straightforward.

Time is running out. Our publication Revenue – Transition options (PDF 408 KB) will help you to make the choice that is right for your business. 

Range of options available

At one end of the spectrum, a company can choose to apply the new standard to all its contracts – and retrospectively adjust each comparative period presented in its first IFRS 15 financial statements.

At the other end of the spectrum, a company can recognise the cumulative effect of applying the new standard at the date of initial application – and make no adjustments to its comparative information. 

Several optional practical expedients create additional alternatives and may ease transition.

Implications beyond the top line

Although the chosen transition option can have a significant effect on revenue trends in the financial statements, it can also affect cost trends. 

To identify the optimal approach, it will be necessary to consider a broad range of other business issues – from IT implementation plans to communications with stakeholders.

What’s the best option for you?

There is no 'one size fits all' approach to this complex decision. To help you choose the best transition option for your business, we have identified a set of core issues that will be relevant to many businesses – and some simple steps you can take now to inform your decision.

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

© 2021 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.

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