IFRS 15 and 16 – Revenue Recognition and Leases for All Industries

Foiz Ahmed
Last Update May 27, 2024
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About This Course

The purpose of IFRS 15 is to define the rules that an entity must adhere to in order to give readers of financial statements pertinent information about the sort, number, timing, and level of uncertainty around revenue and cash flows deriving from customer contracts.

IFRS aims to provide consistency in reporting across industries and guarantee that consumers may obtain relevant information when making decisions. The core principle of IFRS 15 states that a company should record revenue when promised goods or services are delivered to customers in a quantity that corresponds to the payment the company expects to receive in exchange for those goods or services. A five-step approach that will be covered in this course explains this basic concept.

Additionally, the course thoroughly discusses the IFRS 16 principle for measuring and recognizing leases. The concepts of right-of-use assets, lease liability, and service contracts are the main topics of the course.

IFRS 16 is a relatively new standard which has replaced the old standard IAS 17 – Leases. The introduction of IFRS 16 was primarily done to prevent “Off Balance Sheet Financing,” which IAS 17 was unable to prevent.

Tags

Learning Objectives

IFRS 15
revenue recognition standard
how to record revenue for startups, packages
how to record revenue for service companies
Case Study for IFRS 15
Learn IFRS 16 - Leases
A comparison between old standard IAS 17 and the new standard IFRS 16
Off balance sheet financing and the problems it caused in past and how IFRS 16 kills this
Understand what was wrong with the old standard and how does IFRS 16 solves those issues
Lessee Accounting - Measurement of Right of Use Asset and Lease Liability
Sale and lease back transactions.
Exemptions - Short period and small value leases
Remeasurement of lease liability
Lessor accounting for leases
Case studies to show the application of IFRS 16

Requirements

  • There are no specific prerequisites for this course.

Target Audience

  • This course is suitable for finance professionals, corporate executives, policymakers, and anyone interested in understanding IFRS

Curriculum

9 Lessons12h

Introduction to Accounting Standard

3 Introduction to IFRS 15 Core Principle of behind IFRS 15 5 Step Model introduced in Accounting Standard Basic Example of IFRS 15 - 5 Step Approach Explanation of How Revenue Recognition has changed
Introduction to Accounting Standard – 3 Introduction to IFRS 15 Core Principle of behind IFRS 15 5 Step Model introduced in Accounting Standard Basic Example of IFRS 15 – 5 Step Approach Explanation of How Revenue Recognition has changed

5 Steps of Revenue Recognition by IFRS 15

Step 1 - Identification of Contracts with customers Step 2 - Identifying Separate performance Obligations Step 2 - Performance Obligations examples and other considerations Step 3 - Determining Transaction Prices Step 3 - Examples of Transaction Pricing Step 4 - Allocation of Transaction Pricing Step 4 - Allocation of Transaction Prices - Example Step 5 - timing of revenue recognition

Other consideration for IFRS 15

Other Considerations - Contract Assets Specific Guidance - Warranties, Returns and Options Specific Guidance - Upfront fee, Customer Loyalty, bill & hold sale, License Transition, Presentation and Disclosure requirements Impact Challenges & issues with Standard Requirements

Case Study and Question Solved

IFRS 15 Case Study IFRS 15 - Question Part 1 IFRS 15 - Question Part 2 IFRS 15 - Long Question Solved - 1 IFRS 15 - Long Question Solved - 2

Introduction to IFRS 16

Introduction to IFRS 15 • Discord community • Why IFRS 16?

Lease identification

• Understanding lease • Identification of underlying asset • Identification of asset • Right to use • Substitution right • Lease identification assessment • Lease term • Lease term assessment

Lessee accounting

• Overview to lessee accounting • Case study lease liability • Discount rate - IRIL • Discount rate - IBR • Case study Discount Rate • In-substance fixed payments • Variable lease payments • Case study VLP • Residual Value - Guaranteed • Case study GRV • Factors for reasonable certainty • Other important terms and exemption • Lessee accounting and disclosure • Case study lease accounting

Lessor

Overview and lease classification Part 1 • Lease classification Part 2 • Case study on lease classification • Residual Value - Unguaranteed • Lessor accounting and disclosure • Manufacturer and dealer lessor • Case study on lessor accounting

Case Study and Lease components

• Lease modification Part 1 • Lease modification Part 2 • Case study on lease modification • COVID Rent concession • Case study on rent concession • Sublease • Sale and lease back Part 1 • Sale and lease back Part 2 • Case study on sale and leaseback • GAAP Difference • Completion

Your Instructors

Foiz Ahmed

4.96/5
25 Courses
23 Reviews
38 Students
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