IFRS 15 Quick overview Revenue from contracts with customers

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IFRS 15 Quick overview Revenue from contracts with customers – the easy way to obtain an solid overview.

What is the objective of IFRS 15?

To establish principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

How does IFRS 15 meet this objective?

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Practical expedient

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Deferred cost Capitalised costs EM industry

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Deferred cost Capitalised costs EM industry is about other costs to obtain a contract in the entertainment and media (E&M) industry

Incremental costs to obtain a contract will be capitalized if they are expected to be recovered. Such costs may be expensed as incurred as a practical expedient if the amortization period of the asset, including the initial contract term plus expected renewals, is one year or less.

Companies may be required to capitalize more costs under IFRS 15, such as certain subscription-based businesses that incur commission or agency costs at the time long-term subscriptions are executed. Deferred cost Capitalised costs EM industry

Costs subject to capitalization are not just limited to commissions, but also include other costs that are incremental to obtaining … Read more