7 minute read 24 Aug 2018
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How IFRS will change accounting for revenue recognition and leases

If you are reporting under IFRS you are likely to be facing significant changes in reporting requirements for revenue recognition and leases.

IFRS 15 Revenue from Contracts with Customers replaces all existing IFRS revenue recognition requirements. The new standard is effective for annual periods beginning on or after 1 January 2018.

IFRS 15 provides accounting requirements for all revenue and affects all organizations that enter into contracts to provide goods or services to their customers. This may have consequences for the type of financial and nonfinancial data that is captured in order to achieve compliance, as well as the way in which the data is processed and reported.
The new standard will affect many activities across an organization, from sales and marketing through to commercial and finance functions. The scale of impact is driven by industry, each organization’s commercial relationships with its customers and its system and data capabilities.


IFRS 16 Leases will replace the existing IFRS requirements on lease accounting. The new standard is effective for periods beginning on or after 1 January 2019, with limited early application permitted.

IFRS 16 requires lessees to recognize most leases on their balance sheets. Lessees apply a single accounting model for all leases with certain exemptions. Lessor accounting is substantially unchanged. For lessees, recognizing lease-related assets and liabilities could have significant financial reporting and business implications. Entities will need to adjust their accounting policies, processes and internal controls to implement the new standard.


Changes to IFRS 15 Revenue from contracts with customers and IFRS 16 Leases are now affecting many organizations. These changes have an impact beyond financial reporting, affecting IT, systems, processes and controls.