Page 19 - PowerPoint Presentation

IFRS 15 AND CHALLENGES IN ITS

IMPLEMENTATION

Transaction cost Disclosures
o Incremental costs of obtaining a contract o Both qualitative and quantitative
required to be capitalised if expected to information including;
be recovered (e.g. sales commissions). -Disaggregated information
May be expensed if expected contract -Contract balances and a description of
period less than 1 year significant changes.
o Contract fulfilment costs -Amount of revenue related to remaining
-Look to other guidance first (inventory, PPE) performance obligations and an
o If out of scope of other standards, explanation of when revenue is expected
required to be capitalised if: to be recognised.
-Relate directly to a contract and -Significant judgments and changes in
-Relate to future performance and judgments.
-Expected to be recovered
o Amortise capitalised costs as control
transfers.
o Impairment reversals required.

Challenges Success factors
o Technical accounting application o Start preparing now to figure out how
o Increased management judgement. the standard affects your financial
o Project management picture, your investors, and the way you
o Operational process and system do business.
changes o Develop an approach that effectively
o Data gathering & analysis leverages the transition period–
measured approach.
o Communications o Establish robust governance structure.
o Changing business models
o Agree project management and
change management protocol.
o Document as you go–maintain an audit
trail.

Conclusion
It‘s important that entities which apply this new standards to start to analyses
the impact of the new requirements on their business. Understanding the new

requirements may involve different costs for public/ non-public entities such
as: costs for changing/ updating the software, costs for training the
professional staff from accounting, sales, tax, juridical, or other departments,

etc. So, the implications of the new standard are complexes and must be
carefully implemented. This standard provides more useful information for
users of financial statements

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