• AASB 15

    Revenue from Contracts with Customers

AASB 15 Revenue from Contracts with Customers

Background

AASB 15 Revenue from Contracts with Customers fundamentally changes the financial reporting landscape for how entities recognise revenue.

Most entities will face significant challenges when they prepare their financial statements using this new accounting standard. The changes can be complex and can have effects beyond just the accounting treatment. When adopting AASB 15, including deciding which transition route to apply, entities need to consider both the commercial impacts on their business as well as any changes that need to be made to business processes and accounting systems. 

Our AASB 15 experts can help you determine the impact of the new standard on your reported earnings.

Industry

Steps to Implementation

Steps to implementation - IFRS 15

Impacts of AASB 15 Adoption

The effect of adopting the new revenue standard raises many questions such as:

  • How will revenue recognition be impacted?
  • Which processes and systems will need changing?
  • Which wider business planning activities will be affected?
  • What staff training will be required?
  • How will current agreements be affected?

AASB 15 – Industry Heat Map

As a guide the heat map below considers the relative level of impact and complexity when adopting AASB 15.

Red Red denotes a high level of potential impact and complexity.
Amber Amber denotes a medium level of potential impact and complexity.
Green Dark teal denotes a low level of potential impact and complexity.

Industry

Scope

Step 1
Identify the contract

Step 2
Determine the performance obligations

Step3
Determine consideration

Step 4
Allocate consideration

Step 5
Recognise revenue

Retail

Green Green Red Green Red Amber

FMCG

Green Amber Red Red Red Amber

Software

Red Red Red Red Red Red

Telcos

Green Amber Red Amber Red Amber

Licensors

Red Red Red Red Amber Red

Building and construction

Amber Amber Amber Red Amber Red

Residential real estate construction

Amber Red Red Red Red Red

Manufacturing

Green Red Amber Red Amber Amber

Mining

Red Green Amber Red Amber Amber

Professional Services

Amber Red Red Red Red Red

Please see the AASB 15 Fact Sheet for further information including:

  • Commercial and practical considerations
  • A checklist of complex issues
  • The tax impacts; and
  • Consideration of the adoption methodology.