European Institute of Management and Finance | IFRS Updates on Revenue Recognition
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IFRS Updates on Revenue Recognition

IFRS Updates on Revenue Recognition

 

When to recognize revenue? This simple question is one of the most controversial issues in today’s accounting. It’s simple and easy when you sell goods, but how about long-term contracts or some sort of services? It is vital that companies and professionals have some rules on when to recognize the revenue from all these things, because all the profits and losses, their reputation in the eyes of the outside world and their taxes will depend on this.

 

Revenue recognition rules have changed, and you must be aware of the impact of these changes. This seminar has been specifically developed to be helpful to preparers and users of financial statements. It intends to cover, in depth, the principles of one very important IFRSs, the Revenue from Contracts with Customers (IFRS 15). IFRS 15 Revenue from Contracts with Customers has been effective from 1 January 2018 and replaced IAS 18 Revenue Recognition and IAS 11 Construction Contracts.

 

The aim of the programme is to prepare the participants for the necessary changes that have been introduced by the new Standard.  The programme will highlight the differences between the existing Standards (IAS 11 constructions Contracts and IAS 18 Revenue) that have been replaced and the new Standards IFRS 15.

 

With the use of practical examples, participants will consider what impact this new standard has had on organisations and how it will continue to impact them.

 

This programme answers questions such as:

 

  • How does the new standards affect the timing of revenue recognition?
  • What are the standards’ presentation requirements?
  • How can preparers deliver the enhanced disclosures required by the new standard?
  • What choices are there regarding transitional requirements?
  • What is the likely impact on different industries, such as telecoms, software, extractive industries, manufacturing and retail?
  • How and when are royalties, dividends and interest income recorded?

 

 

Programme Objectives

 

By the end of the programme, participants will be able to:

 

  • Know and understand the scope of the new revenue recognition standard
  • Apply the five steps to recognise revenue
  • Understand the required changes to the measurement of revenue
  • Plan how to implement the transition
  • Identify new presentation and disclosure requirements

 

 

Programme Outline

 

IFRS 15: Revenue from Contracts with Customers

  • Scope
  • Recognition
    • Identifying the contract
    • Contract modifications
    • Identifying separate performance obligations
    • Satisfying performance obligations – over time or at a point in time
  • Measurement
    • Determining the transaction price – variable consideration, time value of money
    • Allocation of price to separate performance obligations
  • Contract costs – obtaining and fulfilling
  • Contract assets
  • Presentation
  • Disclosure
  • Transition options
  • Application guidance
    • Sale with right of return
    • Warranties
    • Principal versus agent considerations
    • Upfront fees
    • Licensing and rights to use intellectual property
    • Repurchase agreements
    • Consignment arrangements
    • Bill-and-hold arrangements
    • Customer acceptance

 

IAS 18: Revenue vs. IFRS 15: Revenue from Contracts with Customers

 

IAS 11: Construction Contracts vs. IFRS 15: Revenue from Contracts with Customers

 

Case Studies Application:

  • The decision to separate or combine the contracts with the same customer
  • Modifications to existing contracts and whether to treat them as modifications or additional standalone contracts
  • The identification and impact of separate performance obligations
  • Fixed and variable consideration
  • Refunds to customers
  • Financing components of revenue
  • Methods of allocating the transaction price to performance obligations
  • Recognition of revenue at a point in time or over time

 

 

Training Style

 

  • Illustration of key terms and concepts
  • Preparation and discussion of practical examples, including mini cases
  • The course will have both a theoretical and practical framework with real examples drawn from actual companies, local and international
  • Activities and Break-out groups

 

 

CPD Recognition

 

This programme may be approved for up to 4 CPD units in Accounting Standards. Eligibility criteria and CPD Units are verified directly by your association, regulator or other bodies which you hold membership.

 

Professionals requiring CPD units to meet the education requirements for an occupational licence renewal, and/or for maintaining other professional memberships/certifications which accept CPD in Accounting Standards, are advised to consider training subjects in categories that indicate CPD training in Accounting Standards.

 

 

Who Should Attend

 

  • CEOs / CFOs
  • Auditors, Financial Controllers, Tax Professionals
  • Financial reporting staff of large organizations and entities
  • Individuals working in Accounting & Finance Departments
  • All professionals who want to expand their knowledge in IFRS