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IFRS 15 meets expectations despite challenges

The International Accounting Standards Board (IASB) has completed its post-implementation review of IFRS 15, the revenue recognition standard, concluding that it is working as intended and providing valuable information for investors. Issued in 2014, IFRS 15 was the first standard jointly developed with the US Financial Accounting Standards Board (FASB) to ensure consistent revenue recognition across global markets.

Despite the positive outcome, the review highlighted some application challenges. Companies and accounting firms reported that implementing IFRS 15 required significant effort, though they have since developed appropriate accounting policies and procedures.

Stakeholders emphasised that while the five-step revenue recognition model offers a solid framework, applying the standard to complex transactions remains demanding. Many have requested additional guidance, including illustrative examples and educational materials, to ease its application.

While the overall feedback was favourable, the IASB has identified several areas needing further attention. These include determining whether a company is acting as a principal or agent in transactions, handling payments to customers, and assessing control over intangible assets and services. Additionally, stakeholders highlighted the need for better alignment with other standards, such as IFRS 10, IFRS 11, IFRS 12, and IFRS 16.

The IASB plans to address these issues in its next agenda consultation, scheduled for late 2025, to ensure the standard continues to meet investor needs without causing further disruption.

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