IFRS industry insights: Real Estate Sector
New revenue Standard could have a major impact on profile of revenue and profit recognition
The International Accounting Standards Board (IASB) has published a new Standard, IFRS 15 Revenue from Contracts with Customers (‘the new standard’). The new Standard outlines a single comprehensive model of accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, which is found currently across several Standards interpretations with IFRSs.
The core principle is that an entity recognises revenue to reflect the transfer of goods or services , measured as the amount to which the entity expects to be entitled in exchange for those goods or services. However the new Standard does not apply to transactions that are instead within the scope of leasing standard.