IFRS 15, also known as the International Financial Reporting Standard 15, is an accounting
standard that provides guidance on how to recognize revenue from contracts with customers.
This standard was developed jointly by the International Accounting Standards Board (IASB)
and the Financial Accounting Standards Board (FASB) to provide a uniform approach to revenue
recognition across different jurisdictions.
The IFRS 15 standard contains five key steps that companies must follow when recognizing
revenue from contracts with customers. These steps include identifying the contract with the
customer, identifying the performance obligations, determining the transaction price, allocating
the transaction price to the performance obligations, and recognizing revenue when the
performance obligations are satisfied.
One of the key features of IFRS 15 is that companies are required to recognize revenue when the
performance obligations are satisfied, as opposed to recognizing revenue when the payment is
received. This means that companies must carefully consider when the goods or services are
delivered, and revenue must be recognized at that point.
IFRS 15 also requires companies to provide more detailed disclosures about their revenue
recognition policies and practices. Companies must provide information about the nature,
amount, timing, and uncertainty of revenue and cash flows arising from contracts with
customers.
Overall, IFRS 15 is a comprehensive accounting standard that provides guidance on how to
recognize revenue from contracts with customers. Companies must carefully follow the five key
steps outlined in the standard and provide detailed disclosures about their revenue recognition
policies and practices.