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IFRS 15 (Revenue Accounting)

IFRS 15: Revenue from Contracts with Customers is a new regulation effective January 1, 2018. It specifies:

  • How and when IFRS reporters will recognize revenue
  • Requirements for more informative, relevant disclosures for those who use financial statements

First proposed on May 28, 2014, it has been published as a part of the IFRS/US GAAP convergence project by the IASB and FASB. Its objective is to provide more clarity around the nature, amount, time and uncertainty of revenue and cash flows in contracts with a customer found in financial statements. The standard will apply to all IFRS reporting entities and all contracts with customers except leases, financial instruments and insurance contracts.

According to IFRS.org, IFRS 15 sets out to:

  • Remove inconsistencies and weaknesses in existing revenue recognition standards by providing clear principles for revenue recognition in a robust framework
  • Provide a single revenue recognition model which will improve comparability over a range of industries, companies and geographical boundaries
  • Simplify the preparation of financial statements by reducing the number of requirements that preparers have to refer to

IFRS 15 also introduces a five step methodology for transaction analysis and survey revenue definition, with greater emphasis on timing and amounts.


1. Identify the contract with the customer
2. Identify performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognize revenue when (or as) the entity satisfies a performance obligation.


The industries the standard is set out to impact most are: telecommunications, media, healthcare and pharmaceuticals, construction, energy, distribution, airlines and travel, retail, transportation, distributors, and information technology.


Discover how CCH Tagetik Performance Management Software delivers:

IFRS 15 - Revenue Accounting