Revenue from contracts with customers a guide to ifrs 15 ias plus. It introduces extensive quantitative and qualitative requirements, which apply regardless of the impact of the new standard on your revenue line. Although the definition of a lease under pfrs 16 is similar to pas 17 and ifric 4, pfrs 16. Contracts that are outside the scope of ifrs 15 include leases ifrs 16 leases or, for entities that have not yet adopted ifrs 16, ias 17 leases, insurance contracts ifrs 17 insurance contracts, or for entities that have not yet adopted. Overview of philippine financial reporting standards 9 pfrs 9 i. How should an entity determine whether a promise is a distinct performance obligation and should be accounted for separately or whether it should be bundled with other promises to be included in the application of the remaining. Under pfrs 15, an entity recognizes revenue to depict the. Philippine financial reporting standards 9 financial. Title date issued effective date ifrs 1 firsttime adoption of international financial reporting standards 24 nov 2008. Entities pfrs for smes as adopted by the commission.
The standard was published in may 2014 and is effective from 1 january 2018. Revenue recognition from contracts with customers major changes in the offing. To download audio recordings or meeting reports of agenda topics visit. Clarifications to ifrs 15 revenue from contracts with. Please consult your preferred accounting, tax, andor legal consultant for the specific details applicable. Sec memorandum circular 201814 pfrs 15 implementation. Pfrs 16 leases overview philippine accounting and tax. New pfrs standards effective after 1 january 2018 under paragraph 30 of pas 8, entities need to disclose any new pfrss that are issued but not yet effective and that are likely to impact the entity. All companies are impacted by the disclosure requirements of ifrs 15, the new revenue standard, which is effective in a matter of weeks. Ifrs fair value measurement is issued by the internat ional accounting standards board iasb, 30 cannon street, london ec4m 6xh, united kingdom. Possibly the greatest shift in the final standard was that the iasb considered this to be a stand. Ifrs 15 revenue from contracts with customers deloitte.
Ifrs 15 revenue from contracts with customers icaew. The revised standard gives preparers of financial statements the option of presenting items of income and expense and components of. The largely converged revenue standards, ifrs 15 revenue from contracts. By now companies are probably familiar with pfrs 16s headline change lessees will recognize lease liability, and a rightofuse asset for almost all leases. Sec memorandum circular 201814 pfrs 15 implementation issues affecting real estate industry. Companies can estimate the size of their lease liability at a high level by taking operating lease commitments and discounting the projected cash flows. Applying ifrs 15, an entity recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to.
Ifrs 15 revenue from contracts with customers provides a single, principlesbased fivestep model that should be applied to determine how and when to recognise revenue from contracts with customers. This accounting alert is issued to provide guidance relating to the securities and exchange commissions sec or the commission resolution regarding some implementation issues affecting the real estate industry brought about by the adoption of pfrs 15, revenue from contracts with customers, as. Ifrs update of standards and interpretations in issue at 31 march 2018 6 ifrs 9 financial instruments effective for annual periods beginning on or after 1 january 2018. Scope ifrs 15 applies to all contracts with customers, except for those that are within the scope of other ifrss. These differences in pfrs membership referred to as membership tiers are defined as follows. Entities that determined bundled goods or services which should be treated as separate performance obligations under pfrs 15, may find allocating the transaction. Pfrs members who joined july 1, 2009 through january 8, 2010 and did not elect to be covered by article 22 opt into tier 5, can be covered by article 11 or article 14 benefits, depending on their retirement plan election. Philippine interpretations committee 1 pfrs 2, sharebased payment pfrs 2 price difference between the institutional offer price and the retail offer price for shares in an initial public offering issue should an entity account for a price difference between the institutional offer price and the. But the new ifrs15 accounting standard on revenue recognition. Pfrs 15 requires entities to determine the standalone selling price of all the performance obligations and allocate the transaction price based on their standalone selling prices. Ifrs 15 revenue from contracts with customers your questions answered.
The investor will be required to either apply the equity method of accounting or recognize, on a linebyline basis, its share of the underlying assets, liabilities, revenues and expenses. This online course provides discussion of the new pfrs 15, revenue from contracts with customers. Chitty on contracts chitty on contracts pdf chitty on contracts 32nd edition chitty on contract contracts 9th ed contracts law of contracts obligations and contracts federal contracts optionc in nec 3 contracts engineering law and i. Ifrs 15 revenue from contracts with customers ias plus. Standards pfrs philippine accounting standards pas title effective date brief description changes such as transactions with third parties. Ifrs 11 joint arrangements 1 overview ifrs 11 describes the accounting for a joint arrangement. Clarifications to ifrs 15 revenue from contracts with customers is issued by the international accounting. Key requirements classification and measurement of financial assets except for certain trade receivables, an entity initially measures. Facing new challenges 1 overview 2 1ep 1 identify the contract with a customer st 3 1. Ifrs 15 revenue from contracts with customers 2 defined terms ifrs 15 defines the following terms that form an integral part of this ifrs. Implementation of pfrs 15 revenue from contracts with. Sas 10 part 1 and sas 15 part 2 issued in 1990 and 1997.
Appendix overview of philippine financial reporting. In the eu, the audit report and basis of presentation note refer to compliance with ifrss as adopted by the eu. The measurement categories in which financial assets shall be classified under pfrs9 are as follows. This summary includes all new standards and amendments issued before 31 december 2017 with an effective date beginning on or after 1 january 2018. The iasbs standard ifrs 15 revenue from contracts with customers is. Contract an agreement between two or more parties that creates enforceable rights and obligations. A guide through ifrs for small and mediumsized entities. Following a discussion paper in 2004, and an exposure draft in 2007, the ifrs for smes standard was issued in july 2009. Revenue from contracts with customers a guide to ifrs 15. Topics include philippine financial reporting standards pfrs 15. Pdf on nov 26, 2015, nsiah richard and others published ifrs 15. Many smaller unlisted companies are not expected to be directly affected by ifrs 16 on the grounds that a the ifrs for smes has not been changed by ifrs 16 and b a limited number of smaller unlisted companies are. For entities with a yearend of 31 december, the date of initial application will be 1 january 2019, unless the standard is adopted early. Customer a party that has contracted with an entity to obtain goods or services that are an output of the.
This course will also update learners on how the new standard has changed the application of revenue recognition. Additionally, it was pointed out that, like sme, the term private entity has particular meanings in some countries. It will also help participants put new and revised pfrs accounting principles into practice and determine their impact on pfrs financial statements. Ifrs 15 was issued in may 2014 and applies to an annual reporting period beginning on or. Ifrs 15 has a broadened scope since it not only addresses revenue. For pfrs members who retired january 1, 1968 and after, upon your death your surviving spousepartner is eligible to receive a pension benefit equal to 50% of your final compensation, plus 15% of your final compensation for one eligible child or 25% of your final compensation for two or more eligible children. Implementation of pfrs 15 revenue from contracts with customers starting 01 january 2018 12 december 2017. The standard provides a single, principles based fivestep model to be applied to all contracts with customers. This article is for informational and general conceptual guidance only. A contract with a customer may be partially within the scope of ifrs 15 and partially within the scope of another standard, in which case. Illustrative examples international financial reporting. Ifrs 15 specifies how and when an ifrs reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures.