Welcome to IFRS Newsletter – a newsletter that offers a summary of certain developments in International Financial Reporting Standards (IFRS) along with insights into topical issues.
We begin this third edition of the year by looking at items in the International Accounting Standards Board (IASB)’s pipeline, including the deferral of the adoption of IFRS 15 Revenue from Contracts with Customers; IFRS-related news at Grant Thornton; and a general round-up of financial reporting developments.
You can find out about the implementation dates of newer standards that are not yet mandatory towards the end of the document, as well as a list of IASB publications that are out for comment.
IASB confirms one-year deferral of the effective date of IFRS 15
Following on from the U.S. Financial Accounting Standards Board’s (FASB) decision to defer the effective date of its version of the new global revenue standard for one year, the IASB has now confirmed a similar deferral.
As a result of the deferral, entities will apply IFRS 15 for annual reporting periods beginning on or after January 1, 2018 rather than being required to apply IFRS 15 for annual reporting periods beginning on or after January 1, 2017 (earlier application of IFRS 15 continues to be permitted).
In addition, the IASB published an exposure draft which proposes targeted amendments to IFRS 15 to clarify certain aspects of the standard that have been raised by the joint Transition Resource Group. These include clarifying the guidance on licences, identifying performance obligations, and principal versus agent considérations.
Grant Thornton International Ltd comment
On balance we support the deferral of IFRS 15. While we feel that most companies would be able to implement the
standard by the original effective date, some companies face considerable challenges to meet that deadline for a number of reasons.
For example, IFRS 15 is likely to have a greater impact outside of the accounting function (e.g. compensation, contracting, broad policies and systems) than most significant new standards, and even those entities that have worked hard to prepare for transition would no doubt benefit to some extent from more time. Accordingly, we believe that a one-year deferral will increase the likelihood of a successful transition by all entities.