IFRS 15 Implementation

The European Financial Reporting Advisory Group (EFRAG) is conducting an extensive review of IFRS 15 - Revenue from Contracts with Customers. It may lead to targeted guidance and impact financial institutions. Prepare for potential changes. Stay informed and adaptive for compliance.

IFRS 15 Implementation
EU Accounting Standards Review

IFRS 15 Implementation: EFRAG Calls for User Input

Source: European Financial Reporting Advisory Group Keywords EFRAG IFRS 15

The European Financial Reporting Advisory Group (EFRAG) has recently sought the views of financial statement users on the effects of implementing the International Financial Reporting Standards 15 (IFRS 15) - Revenue from Contracts with Customers. This is part of their extensive Post-implementation Review (PIR) of IFRS 15, which aims to assess the impact and effectiveness of this standard. Inviting users for one-on-one interviews till early October 2023, EFRAG aims to gain deeper insights into the actual effects of IFRS 15 implementation. On 29th June 2023, the International Accounting Standards Board (IASB) had issued a Request for Information (RFI) for the PIR of IFRS 15, seeking comments until 29th October 2023. The IFRS 15 was developed with the intention to provide a robust framework for revenue recognition, measurement, and disclosure, improve comparability across entities and markets, reduce the need for case-by-case interpretive guidance, and enhance disclosure requirements. EFRAG, as part of its outreach, is focusing on the usefulness of these required disclosures, seeking suggestions for improvement and balancing the cost-benefit aspects.





Post-implementation Review of IFRS 15: Implications for the Financial Sector and Strategies for Compliance


In a crucial development for the global financial sector, the European Financial Reporting Advisory Group (EFRAG) has commenced an extensive Post-implementation Review (PIR) of the International Financial Reporting Standards 15 (IFRS 15) - Revenue from Contracts with Customers. This in-depth analysis is set to shed light on the standard's impact across different entities, industries, and jurisdictions, potentially paving the way for targeted guidance and amendments.

The IFRS 15 has been instrumental in establishing a robust framework for revenue recognition, measurement, and disclosure, ensuring comparability across markets and reducing the need for case-by-case interpretive guidance. As part of the review, EFRAG is meticulously examining the utility of these required disclosures, seeking to balance the cost-benefit aspects and identify areas for improvement.

Such comprehensive scrutiny has far-reaching implications for diverse financial institutions, ranging from commercial and investment banks to insurance companies, asset management firms, and accounting departments. It can lead to consequential shifts in revenue recognition and disclosure requirements, thereby affecting the financial results reported by these entities.

With the potential for heightened complexity and financial reporting costs, institutions need to prepare for the impending changes. Staying informed about the review's progress, providing feedback during the Request for Information (RFI) period, and potentially revising internal procedures are some strategies institutions can employ to mitigate the impact.

The timeline for these changes remains fluid, with the RFI period set to conclude on 29th October 2023. Depending on the feedback's complexity and volume, the implementation of potential changes could likely occur from 2025 or later.

This proactive involvement of financial statement users in the review process highlights EFRAG's commitment to stakeholder engagement and responsiveness. Such initiatives are expected to bolster the credibility and acceptance of IFRS standards, leading to more effective regulation.

The review holds the promise of improved clarity and transparency in financial reporting, enabling investors and other stakeholders to make informed decisions. However, it also underscores the necessity for financial institutions to stay agile and adaptive, ensuring continued compliance with evolving IFRS standards.

As we navigate this new chapter in financial regulation, it is crucial for all financial institutions to remain abreast with the latest developments, ready to embrace the changes that the review of IFRS 15 could bring.




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IFRS - IFRS 15 Revenue from Contracts with Customers




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