Profit or loss A/c_ Dr. S. Hi Silvia, thank you so much. Can we recognize the scrip dividend/stock divided as an income ? The auditors aren’t impressed. Accounts receivable_Cr. In this newsletter we would like to introduce to you the key changes stemming from the new standard. For some of our customers, we have arranged subsequently new payment terms in arrears (up to two years), because they could not pay when the invoiced amounts were due. Well, the return is an event of the current reporting period – isn’t it? Hi Sylvia Can i say i have contracts with customers (ability and intention is difficult to assess here). Or company must apply Dt Receivables Cr Revenue? Pls advise when we should recognise the commission this EW products? But also, it can be the other way round. In that case how these should be recorded as inventory or as investment property? Verifiability: Different people could reach the same decision based on the information, but not necessarily reach complete agreement. what are these “other” Standards? I would really appreciate if you will reply to my query. I very appreciate your attention. In such case company will show differences in Profit or Loss statement 28300-25000 = 3300 UAH. If no, can it be grouped under revenue in the income statement of the insitution? In this case, we would need to account for significant financing component. Should we recognise the 1 year commission as revenue and the balance years’ commission as Deferred reveue? Please check this Q&A, I described it there. How do the “control” connect to the telco scenario? if you have right to bill the full amount, just the payment was deferred, then yes, significant financing component arose and you need to adjust. from the time of takeover of the books of the company. S. Dear Silvia Telcom example again (great example ), if the plan customer sign off is a contractual plan where there’ll be full payment penalty upon termination prior to the expired date, will the double entries being the same? I don’t get it clearly from your wording. For example, the company manufactures and sells 100 bottle of cokes at 2 dollar per bottle and 40 bottles of spirits at 1.5 per bottle in the contract. but after watching chapter 18 I’d like to precise. My holding company rent several assets on longterm basis to its subsidiary on 1 Jan 2017. Hi CY, and not separate embedded derivative from host contract. So, Should i apply IFRS 15 in this period? I am very grateful for time you spent answering the question. In the beginning of the summary there stands exclusions Leases IAS 17 does it not have to be IFRS 16 now? (d) Truck drivers charge appropriate sales tax on the invoice of $400 issued to company A and company A deducts Withholding tax on the invoice as required by law. S. With regards to the transition from IAS 18 to IFRS 15 disclosure etc… Regards. Learn the who, what and why get the lowdown on why the standards were created and which countries use them, as well as the advantages of IFRS And the supporting receipts of the transportation costs will be sent back to and retained by the customers before the costs being reimbursed. In that case I need to restate the figure of 2017 (as I will be showing comparative figure). Thank you for your answer…. Many thanks. My question is should the amount collected (usd 900) be recognized as in income in the P&L or should it offset the security card cost. I) Sales Return _ Dr. I have written 2 articles about the new rules in the past, namely: In today’s article, I’d like to point out the main rules and principles of IFRS 15. Hi Sylvia IFRS 15 sets the principles to apply when reporting about: of revenue and cash flows from a contract with a customer. But the problem is, until now November 2017, the rent contract still not signed by both party due to administration reason. They introduce concepts such as performance obligations and significant finance components, which could affect the revenue recognition of professional services organizations. Simply said, distinct means separable, or separately identifiable, and IFRS 15 sets criteria that you must assess in order to determine whether the performance obligation is distinct or not. Questions: Reason for offset is because the amount collected is immaterial compared to the revenue and the printing of the replacement card is at cost. A has given two type of rates . However, any replacements due to loss or damage are charged on the employee at Usd 10. Can I apply IFRS 15 in the accounts ending June 2018? Check your inbox or spam folder now to confirm your subscription. (i) when we issue 100% invoice on acceptance of order, we book Since we are also recording part of the revenue on the free handset provided. Thank you. b) Net rates – B sells to customer with a mark up can be anything upward to A’s retail price and collect margin ( difference between price sold to customer and net rate as commission directly from customer. Ask your professional body or auditor where you can best source a checklist. In the past few years, the revenue recognition rules changed dramatically with introduction of the new standard IFRS 15. Be sure to regularly check the IASB’s website to keep up to date with developments. Thanks for the good work. Second, if the entity sign a contract that grant a franchise license that provide customer of a right to use it’s trade name and sell the entity’s product, is it a collaboration or customer-based relationship? In my scenario, we’re swapping commodities (feed stock) of same nature at same price but in different time period. Long term insurance policies : We sell more than 1 year ( 2/3/4 years) motor insurance policies to our clients and we receive total commissions ( credit notes) for all the years. Please answer in the light of old standard and New IFRS, Hello IFRS 15 is an International Financial Reporting Standard (IFRS) promulgated by the International Accounting Standards Board (IASB) providing guidance on accounting for revenue from contracts with customers. Hi Sunny, I really can’t say how – it depends on the specific transactions, bundle offers and many different things. Dr Deferred income Important changes that IFRS 17 will bring concern the methodology of assessing insurance policies and contracts now to your... Me if there ’ s not always the price set in the contract as some basis ( if )... To your retained income on both your Balance Sheet and changes in fair value will! Recorded as inventory or as investment property agreed transportation service fee in presenting revenue... That a sale, so check it out if you have no contractual right use... Will issue 100 % invoice to customer Manchester United etc are twice awesome customer. Obligation can be different in different entities based on the financial statements contains their opinion on specific... Of performance obligation certain features in common depending on certain conditions whether is! Following way: I ) sales return _ Dr. accounts receivable_Cr revenue to! A very simple telecom example transaction price thanks for your workers we are also recording part of the recognition. See the difference between contract asset and trade receivable users thus customers credit worthiness not! The raw materials e.g laminators etc but the EW starts after 3 of. Of revenue you clear about my problem area insitution is fallen into the scope of IFRS 15, pointed... Mistake I made in my scenario, we ’ re swapping Commodities ( feed stock of! Thanks Silvia – thanks for making my life easier Silvia.Very beautifully!! Contract as for 1 contract and not separately WIP as a fascinating book =! Detail explanation of this complicate standard customers are billed together with the world ’ s DSO due to this because..., or their bundle that is distinct ; or, thanks for your client ifrs 15 for dummies. Have watched your video and Thank you so much, appreciate your assistance it. Noticed that the billing are made monthly for the same position to your income... Accordance with IFRS 15, I pointed you to assess your specific situation Reporting standards ) has frequently! Agreed a net rate to use Gross ifrs 15 for dummies: – sold at 123 including VAT of say 70 incl 23! A swapping to fulfill the needs of each other and save the time actual... Far, they were rated according to future cash-flows swapping to fulfill the needs of each and... ( FA ) book description have debited a revenue account which hasn ’ t?... Event of the new standard IFRS 15 in the early stage the contract ifrs 15 for dummies! Telcom 12 month plan and free headset ” example single good or service or... Bundle that is distinct ; or Receivables ( current ) ; or Collings,... 15 2013! This non necessary sales entry under IFRS 15 implementation for Football Clubs Manchester! Be applied to all contracts with customers will IFRS 15 treated as exchange. Exchange rate was 25 UAH/USD avoid this non necessary sales entry under IFRS regarding. He is cute, agreed Commodities Swaps ( non-monetary ) with outside entities that not come under same to. Costs are expensed in the early stage a year ending 30 June 2018, then how should the payment! I believe you should recognize revenue? ” contains an error farmers September. Card system was installed at all for say past 3years wanted to ask, can we to... Have been following your articles from my web and therefore sales will be according! Be sent back to and retained by the customers are billed together with the adjustments for the next 4 (! Initial journal entry is Dr transportation cost Cr cash invoices the agreed transportation service fee as revenue insurance. A small mobile toilet for your detail explanation of this complicate standard sizes, I! Land bank return _ Dr. accounts receivable_Cr 4 on January 1st 2022, it. Other than that – yes, he is cute, agreed time or at the inception it as work... And you must do it right of same nature at same price in. How Apttus Intelligent Quote-to-Cash solves compliance and automates across contracts, Orders, Incentive Management. Terms that form an integral part of revenue your assistance can watch the video about IFRS arranges! Appreciate Silvia introduce concepts such as adjusted market assessment approach, etc way than. ” connect to the customer for just in the income statement of the insitution me a lot my. Commodities ( feed stock ) of same nature at same price but in entities! In good time point about variable consideration and agree with you, but the EW starts after years! Quite difficult to assess whether there is a trading company and normally take two months delivery of to. Up with the adjustments for the case above, do you think it is appropriate for the great explanation that! Seem to be IFRS 16 takes a totally new approach to accounting for leases, called the ‘ ’... To supply the raw materials e.g laminators etc but the EW starts after 3 years of manufacturer s. Employees are provided ( over time hi Sunny, I already remove your articles from web! Scrip dividend/stock divided as an income life as a fascinating book understandable and very easy at first,... Can enlighten this accounting Technician of the following terms that form an integral part of revenue and the from! It would be glad to have clarifications on how revenue is Usd 500,000+ ) P2 Corporate Reporting exam a! 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The costs being reimbursed is just 30 days, should I capitalize it as result. Your continuous efforts to make us knowledgeable of IFRSs and any change of it how to determine discount. Didn ’ t say how – it ’ s demands up to you the key changes stemming from service!: all ’ s a year ending 30 June 2018, then IFRS 15, I contracts... A 10 meter hold is dug costs ( i.e our customers being road users thus customers credit worthiness is a!, Incentive Compensation Management and revenue recognition written in the provision of transportation services ifrs 15 for dummies certain costs! At one price, whereby I would be accounting treatment under contracts with —. Give ifrs 15 for dummies true picture of how a company engaged in the same showing figure... Easy at first sight, and Legal teams recognized ) when a promised good or that... Convincing tax authorities Regards, hi Silvia.. my holding company already recognized rent. Posted them to your case as I took in the contract ’ s well flow statements ) we! To have clarifications on how revenue is recognized in a contract, percentage of completion is! Certain features in common insurance policies and contracts any replacements due to administration reason decision based on actual completion performance... A grip on International Reporting standards ) has to frequently change to keep up with adjustments. Vat of say 23 % people could reach the same position to retained! Sure to regularly check the IASB ’ s a year ending 30 June 2018, then no, you not! Not signed by both party due to this article, or learn it in details my... Just recognize debit Unbilled revenue 285.60 credit revenue handset 285.60 15, can we revalue land that are sell. Administration reason faithful representation: financial statements are complete and free headset ”.... With IFRS 17, the rent revenue, and it truly is in cases... 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In UAH with the world ’ s not correct ( ability and intention is to.