IFRS 15 Revenue from Contracts with Customers replaced IAS 18 Revenue, IAS 11 Construction Contracts, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC 31 Revenue—Barter Transactions Involving Advertising Services.

In a joint submission, CA ANZ and CPA Australia agree that, overall, IFRS 15 has introduced improvements to the accounting for revenue recognition. The five-step revenue recognition model is generally seen as robust, providing appropriate revenue recognition outcomes across a range of business models. However, some industries, including software services and telecommunications, and contracts involving more than two parties, have found the implementation more challenging. Most entities incurred significant implementation costs but realised synergies through a better understanding of their revenue activities and the improved quality of financial information.

Our submission highlighted three high priority areas for targeted enhancements:

• Identifying performance obligations, 
• Determining the transaction price, and 
• Principal versus agent considerations.

There is little desire for change to the technical requirements of IFRS 15. Therefore, our submission focuses on recommendations to update existing Illustrative Examples and/or Application Guidance to include the thought process and rationale, and to address more complex scenarios and fact patterns.