In September 2015, the International Accounting Standards Board (IASB) deferred the effective date of IFRS 15 Revenue from Contracts with Customers by one year to provide entities with more time for implementation.
The standard is now effective for annual periods beginning on or after January 1, 2018. Comparatives are required for 2017. Earlier application is still permitted. The Accounting Standards Board (AcSB) approved the final amendment and incorporated it into Part I of the Handbook in January 2016.
Spring into Action Now!
The request for a deferral came from entities well on the road to implementing IFRS 15, who asked the IASB for more time for implementation given the extent of work required. The AcSB heard similar feedback from Canadian entities.
The work to implement the standard is significant and includes:
- understanding the significant changes to accounting for revenue that will affect you;
- reviewing revenue contracts — for example, identifying each contract with a customer and each performance obligation in the contract;
- assessing the extent to which changes are required to processes and IT systems, and then making these changes;
- considering what additional data is needed, for the current period and comparative period, to meet new disclosure requirements; and
- updating assessments of internal controls over financial reporting, and remediating any internal control weaknesses.
As part of this deferral, the IASB noted the importance of having a common effective date with the U.S. Financial Accounting Standards Board’s converged standard — Accounting Standards Update No. 2014‑09 Revenue from Contracts with Customers (Topic 606).
Even with an extra year to get ready, the AcSB encourages you to spring into action now.
Nancy A. Estey, CPA, CA
Principal, Accounting Standards Board
Phone: +1 (416) 204-3271