What is the five-step revenue recognition model under IFRS 15?

IFRS 15 requires five sequential steps. Step 1 is identifying the contract with a customer, including contract combinations and modifications. Step 2 is identifying the distinct performance obligations within it. Step 3 is determining the transaction price, taking account of variable consideration, significant financing components, non-cash consideration and consideration payable to the customer. Step 4 is allocating that price to the performance obligations on the basis of relative standalone selling prices. Step 5 is recognising revenue when, or as, each performance obligation is satisfied, either at a point in time or over time. The model applies across all industries and contract types.

How does IFRS 15 treat variable consideration?

Variable consideration — rebates, refunds, discounts, price concessions, incentives, penalties and performance bonuses — is included in the transaction price only to the extent that it is highly probable a significant reversal of cumulative revenue will not occur once the uncertainty resolves. That threshold is the constraint. The amount is estimated using either the expected value method or the most likely amount, whichever better predicts the entitlement. Applying the constraint requires significant judgement, and it is among the most contested areas in practice, particularly for milestone-based technology contracts and volume rebate programmes in retail.

What is the difference between IFRS 15 and ASC 606?

IFRS 15 and ASC 606 were developed jointly by the IASB and FASB and share the same five-step model, but differences remain. The most significant concerns licences of intellectual property: ASC 606 distinguishes between functional and symbolic licences, while IFRS 15 applies a single model based on whether the licence gives a right to access or a right to use. The available practical expedients, certain disclosure requirements and aspects of the collectability assessment also differ. Dual reporters need to understand where the two diverge, and the programmes address this directly.

How does IFRS 15 apply to technology and SaaS companies?

Technology and software companies face some of the hardest IFRS 15 questions: separating software licences from implementation and support services into distinct performance obligations; determining whether revenue is recognised at a point in time for functional software or over time for hosted and subscription arrangements; allocating the transaction price across bundled contracts where standalone selling prices are not observable; estimating usage-based and milestone consideration under the constraint; and capitalising contract costs such as sales commissions and implementation costs. Each is worked through with practical case studies.

How does IFRS 15 compare with FRS 102 Section 23?

FRS 102 Section 23 Revenue is the UK GAAP equivalent. The revised Section 23, introduced by the FRC's periodic review, aligns UK GAAP much more closely with IFRS 15 by adopting a five-step model, while retaining simplifications proportionate to the entities that apply it. UK subsidiaries of IFRS-reporting groups must still apply IFRS 15 for group reporting purposes, so many finance teams work across both. The programmes cover the interaction, and the practical consequences of the revised Section 23 for UK reporters.

Which sectors are most affected by IFRS 15?

The standard bites hardest where contracts involve multiple deliverables, long durations or uncertain consideration. Technology and software companies wrestle with performance obligation separation and the timing of recognition; telecommunications providers must separate handset and service obligations; construction companies apply the over-time criteria and measure progress; real estate developers determine when control of a property transfers; pharmaceutical companies address milestone payments and licence income; subscription businesses handle setup fees and renewal options; and retailers apply the constraint to rebates and rights of return. Sector-specific case studies feature throughout.

Where do the IFRS 15 courses run, and is in-house delivery available?

The 2-day programme runs in London, Zurich, Dubai, Doha, Cape Town, Singapore, Seoul, Sydney, Toronto, Miami, Bermuda, Lima and Rio de Janeiro, with a live online edition available in every time zone. Bespoke in-house delivery is available worldwide and can be built around an organisation's own revenue contracts, sector and disclosure requirements. A 15% group discount applies for bookings of five or more participants.

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IFRS 15 Revenue Recognition Training Courses | FRS 102 ( 2-Day)

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Revenue Recognition Training Course | IFRS 15 | ASC 606 | FRS 102

Our IFRS 15 Revenue Recognition Training Courses provide practical guidance on IFRS 15 Revenue from Contracts with Customers and ASC 606. The programmes examine the five-step revenue recognition model, performance obligations, the transaction price, variable consideration, contract modifications and disclosure requirements. IFRS 15 applies broadly to revenue from contracts with customers, subject to specified scope exclusions.

IFRS 15 and ASC 606 introduced broadly aligned revenue recognition models, although important differences remain between IFRS and US GAAP. Participants examine complex contractual arrangements, principal-versus-agent assessments, licensing, revenue recognised over time and significant accounting judgements. For UK GAAP reporters, the programme also considers the revised FRS 102 Section 23, effective from 1 January 2026. K-IFRS 1115 is also relevant for Korean entities applying K-IFRS.

Programmes are available in person across 13 global cities, including Bermuda, Cape Town, Doha, Dubai, Lima, London, Miami, Rio de Janeiro, Seoul, Singapore, Sydney, Toronto and Zurich. A live online IFRS 15 course is also available for participants worldwide. Bespoke in-house programmes can be delivered for organisations globally. Contact us to discuss upcoming dates or in-house delivery.