IFRS 15 – Revenue recognition
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General objectiveThis training activity will provide participants with a practical understanding of the new five-step revenue recognition framework under Part I – International Financial Reporting Standards (IFRS) 15, and how to apply it.
The 5-step model framework includes:
- Step 1: identify the contract with the customer
- Step 2: identify the performance obligations
- Step 3: determine the transaction price
- Step 4: allocate the transaction price
- Step 5: recognize revenue, including how and when
- Areas of application challenge
Revenue is an extremely important profit and loss statement top line number that drives bottom line results for all revenue producing companies. Accurate revenue recognition reporting is necessary for internal and also external reporting to maintain investor and creditors confidence in an entity. The objective of this seminar is to provide participants with a practical understanding of the five-step revenue recognition framework under Part I – International Financial Reporting Standards (IFRS) 15, Revenue from Contracts with Customers, and how to apply it. The seminar will address disclosure requirements, discuss key areas of application challenges, key judgments and provide examples applying the standard.
ObjectivesBy the end of this training activity, participants will be able to:
- understand the core principles and concepts, scoping requirements;
- apply the 5-step model, including the specific criteria, provisions and exemptions governing each step in the model;
- identify and apply presentation and disclosure requirements, including understanding key changes and practice challenges;
- recognize and observe examples of other application guidance in the standard.
Although revenue recognition rules are generally complex, real-life examples will be used to show how to effectively apply the model to various products and service sales transactions in various industries.
- Overview and scope, including transitional requirements
- The 5-step model framework, including how to apply it
- Step 1 – Identify the contract with the customer
- Step 2 – Identify the performance obligations
- Step 3 – Determine the transaction price
- Step 4 – Allocate the transaction price
- Step 5 – Recognize revenue, including how and when
- Practical challenges and considerations and current developments
- Disclosure and presentation requirements
- Other application guidance on various topics such as warranties, licenses, capitalization of costs of obtaining and fulfilling a contract, contract modifications, etc.
Thistraining activity is generally suitable for professionals who are responsible for revenue recognition oversight and the accounting and/or auditing thereof.
Participants should pre-read IFRS 15, Revenue from Contracts with Customers, contained in the CPA Handbook – Accounting Part I.