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Last updated: 27 December 2019 Principal vs. agent considerations are otherwise known as gross vs. net presentation of revenue. A principal recognises revenue and expenses in gross amounts, whereas an agent recognises only fees or commissions, even if gross cash flows go through the agent (IFRS 15.B35-B36). Principal and agent – definitions The two key … Read more

Last updated: 18 March 2020 Transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, e.g. VAT (IFRS 15.47). Transaction price is determined after taking into account the impact of the … Read more

Last updated: 1 March 2020 When to recognise revenue Revenue is recognised when/as performance obligations are satisfied in the amount of transaction price allocated to satisfied performance obligations (IFRS 15.46). A performance obligation is satisfied by transferring a promised good or service to a customer (IFRS 15.31). A good or service is transferred to a … Read more

Last updated: 28 February 2020 Contract A contract must meet the following criteria in order to be accounted for under IFRS 15 (IFRS 15.9): the parties to the contract have approved the contract and are committed to perform their obligations; the entity can identify each party’s rights regarding the goods or services to be transferred; … Read more

Last updated: 19 February 2020 5-step revenue recognition model Revenue recognition under IFRS 15 is often presented as a 5-step model as shown below, although IFRS 15 itself does not follow these steps directly: Identify the contract. Identify performance obligations in the contract. Determine the transaction price. Allocate the transaction price to performance obligations. Recognise … Read more

Last updated: 7 November 2018 Definition of fair value and measurement approach Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (IFRS 13.9). In other words, it is a current exit price … Read more

Last updated: 7 November 2018 Scope of IFRS 12 IFRS 12 is a comprehensive standard that covers all disclosure requirements relating to interests in other entities. The objective of IFRS 12 is to require an entity to disclose information that enables users of its financial statements to evaluate the nature of, and risks associated with, … Read more

Last updated: 14 May 2020 Reporting principles for entities that have interests in joint arrangements, that is arrangements which are controlled jointly with other party (or parties), are set out in IFRS 11. Accounting for joint arrangements focuses on the rights and obligations of the parties to joint arrangements, regardless of those arrangements’ structure or … Read more

Last updated: 14 May 2020 Consolidated financial statements are financial statements of a group in which assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity and with uniform accounting policies (IFRS 10.19,B86-B87). Preparation of consolidated financial statements is governed by IFRS … Read more