The replacement to IAS 18 & ASC 605 is being introduced from 1st January 2018; is your finance team ready?
If you’re not already in auditor discussions regarding the potential consequences of IFRS 15 on your business, you should be. While the new standard may have no impact on your statutory reporting today, it is important to be prepared for the potential impact on your business. The entire accounting approach to revenue recognition is undergoing a wholesale re-write.
Rather than relying on using a deferred revenue account, you will need to identify and account for performance obligations. This will impact companies with complex sales contracts and/or multiple points of sales delivery; e.g. bundled sales and service contracts. What changes are being introduced? Revenue recognition is taking a more scenario and rules based approach to what can be recognised and more importantly when.