A new global standard on revenue - What this means for the manufacturing industry

The International Accounting Standards Board (IASB) and US FASB have finally issued their new Standard on revenue – IFRS 15 ‘Revenue from Contracts with Customers’ (ASU 2014-09 or Topic 606 in the US). This bulletin summarises the new requirements and what they will mean for the manufacturing industry.

Recently issued IFRS 15 ‘Revenue from Contracts with Customers’ replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction Contracts’ and provides significant new guidance addressing key questions such as:

• Can contract acquisition costs be capitalised, or must they be expensed?
• Under what conditions can customisation or installation services be considered separately from the related product sale?
• Can non-refundable upfront fees be recognised in revenue when received?
• How should incentive payments be accounted for?
• Can revenue be recognised before delivery has occurred (bill and hold)?
• How are standard and extended warranties treated?
• Is it possible to recognise revenue before the customer signs off on acceptance?

With IFRS 15’s potential to significantly impact the timing and amount of revenue recognised, manufacturing entities will want to invest time up front to ensure all critical impacts are identified and understood well in advance of implementation

Download the new global standard on revenue - What this means for the manufacturing industry

The International Accounting Standards Board (IASB) and US FASB have finally issued their new Standard on revenue – IFRS 15 ‘Revenue from Contracts with Customers’ .

Download PDF [1303 kb]