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Consumer products IFRS financial statements survey: Five steps to revenue recognition - EY - Global

Consumer products IFRS financial statements survey

Five steps to revenue recognition

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The proposals for revisions to the model for revenue recognition from contracts with customers are still changing and current decisions remain tentative.

Impact on consumer products

For many transactions common in the CP sector, the ED may not change the timing or amount of revenue recognition.

However, there will be instances where this will have an impact, particularly on the accounting for bad debts and in accounting for sales incentives and vendor allowances, product warranties and licenses.

The proposals for revisions to the model for revenue recognition from contracts with customers are still changing and current decisions remain tentative.

The original exposure draft issued by the Boards in June 2010 went through extensive public consultation, and the Boards have now completed re-deliberations on the proposals in the ED.

The second exposure draft was issued on November 14, 2011.

The model

The proposed model includes five steps that entities would apply to determine the appropriate amount and timing of revenue recognition:


Five steps to revenue recognition

The Boards are proposing that entities apply the new guidance retrospectively for all periods presented in the period of adoption, although the original ED did not include a proposed effective date.



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