IFRS 15: The 10 key points for entities in sectors with long-term contracts

IFRS 15 is a major issue for entities in sectors with long-term contracts. This document is a clear overview of the key points to remember.

2016, an important year in terms of transition

The 10 key points:

Revenue recognition over time is no longer automatic
A limited choice of methods for measuring revenue recognised over time
The end of margin smoothing
A potentially different breakdown of contracts, with a separate margin for each distinct good or service
A clear framework for estimating variable consideration
Upward or downward adjustment of revenue where there is a significant financing component
A legal approach to contracts and contract modifications
The end of due to/due from
Note disclosure of the backlog, now defined in accounting terms
A restrictive approach to recognize as an asset the costs of obtaining a contract

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