Transitioning to the new revenue standard – what are your options?
There are three ways you can transition when first applying AASB 15 Revenue from Contracts with Customers:
- Retrospective method
- Retrospective method with (any or all of the four) practical expedients, or
- Cumulative effect method.
Given that transition date for the new revenue standard is only a year away for entities with 31 December year ends, we recommend that you start planning your transition process now as there is a significant amount of work required to determine the impact of each of these transition methods.
For more information on the differences in these three methods, and to get an idea of which method will be most appropriate for your entity, BDO’s article in the Chartered Accountants Australia and New Zealand’s Perspective Series is helpful when deciding which transition route to take when first applying AASB 15.