Effects of the COVID-19 on 2020 Reporting Periods

For reporting periods ending on or after 31 January 2020, the effects of the COVID-19 would need to be incorporated into the preparation of financial statements. The financial reporting implications will depend on the facts and circumstances of each entity. The following are some of the financial reporting considerations that entities and engagement teams need … Continue reading Effects of the COVID-19 on 2020 Reporting Periods

IFRS 15 – Performance obligations satisfied over time

Revenue can be recognized either over a period of time or at a point in time, depending on when a performance obligation is fulfilled. An entity must consider 3 criteria to determine whether control over an asset is transferred over time. If any of these criteria is met, then the entity should recognize revenue over … Continue reading IFRS 15 – Performance obligations satisfied over time


Examples of variable consideration include discounts, rebates, refunds, credits, price concession, incentives, performance bonuses and penalties. IFRS 15 introduces a constraint such that for most types of variable consideration should only be included in the transaction price to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue … Continue reading IFRS 15 – VARIABLE CONSIDERATION

IFRS 15 – Costs of obtaining a contract

Under IFRS 15, costs to obtain a contract that would have been incurred irrespective of whether the contract was obtained are recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer irrespective of whether the contract is obtained. The incremental costs of obtaining a contract with a customer are recognized … Continue reading IFRS 15 – Costs of obtaining a contract


Under IFRS 15, an entity is required to assess whether a contract contains a significant financing component, if it receives consideration more than one year before or after it transfers goods or services to the customer (i.e., the consideration is prepaid or is paid after the goods or services are provided). If the timing of … Continue reading IFRS 15 – SIGNIFICANT FINANCING COMPONENT

IFRS 15 & Customer Loyalty Programs

When customers acquire goods from a retailer, they are sometimes awarded with points or vouchers that can be used to obtain other goods or services from that retailer, or to receive a discount on the future purchase of goods or services. Under IFRS 15, a loyalty/reward program creates a performance obligation, when it provides a material right to the customer; hence … Continue reading IFRS 15 & Customer Loyalty Programs

IFRS 15 & Contract Modifications

Contract modifications are considered to be changes in the scope or price (or both) of a contract and may be accounted for in a number of different ways, depending on the nature of the change. Once approved, a determination must be made as to whether the contract modification should be accounted for as a separate contract. Separate Contract In order for … Continue reading IFRS 15 & Contract Modifications