This is just one in a series of blog posts on the new revenue standard that we have summarized here, along with other resources to help you with implementation. shipping and handling services, the mining entity applying IFRS 15 must determine whether the shipping and handling activities undertaken after transfer of control of the underlying goods are distinct from the shipped goods. evaluates the impact of IFRS 15. To summarize, if the customer takes control of the goods BEFORE shipment (e.g. It just state there is no policy choice, but not clear how it should be applied ? TheseIFRS 15 ED areas include accounting for licences, principal versus agent ... shipping and handling … For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2019. IFRS 15 requires an entity to assess the goods or services promised in a contract to ... of a contract, and an accounting policy election relating to shipping and handling activities that the IASB is not proposing to address. I'm not sure if this is an election but I've seen some diversity in practice and am having trouble finding clear guidance. See the appendix of this Heads Up for a comparison of the IASB’s and FASB’s guidance. This would be the case under both U.S. GAAP … Read the following publications to further understand how the sector-specific arrangements are affected, … Disclaimer This post is published to spread the love of GAAP and provided for informational purposes only. ... read more, Views on how restrictions on financial instruments impact the determination of fair value are evolving, potentially changing current practice for investment companies under ASC 946. Editor’s Note: On April 12, 2016, the IASB issued clarifications to IFRS 15 that address (1) identifying performance obligations, (2) principal-versus-agent considerations, and (3) licensing. h�bbd``b`� ���A��%bI�X@�oWD���s2���r� f ��$����.�x�g@B�*�S ��R$�> -}&FfQ�,#����-_ e-c However, the SEC noted that for significant S&H costs classified outside cost of sales, registrants should consider whether they should disclose the amount of costs and the line item on the income statement that includes them. This paper accompanies the following IASB agenda papers: (a) Agenda paper 7A Implications of amending IFRS 15 before the mandatory effective date. h�b```��lE cc`a��p�gb9�0Ⴆ�v�*f f}�M��L��q�e���'mp��!�P0��Fеk[��H��][�3Ω���⋠�@k�d>[�,���������ލ �L'����/��5r8&��w���L��P���2�� ��HZ. Scribd es el sitio social de lectura y editoriales más grande del mundo. separate performance obligation). Today we continue our series on all things freight accounting by addressing when you should be accounting for freight costs.In our first series we laid out how important it was to understand as a … Very good question, Jason! The article stopped short, however, of making the statement that "shipping and handling costs that are incurred after a customer takes control "must be treated as a separate performance obligation" or "should be assessed to determine..". Step 5 – Recognize Revenue (December 15, 2015) General Guidance. Dr. The toll refiner will typically make an economic return by charging a unit cost but it will also usually retain any metal recoveries above a contractual threshold and may also retain certain by-products for no consideration. Do you just record the inventory at $103? Share with your friends. IFRS guidance does not allow an entity to make a policy election to account for shipping and handling activities that occur after the customer has obtained control of a good as an activity to fulfill the promise to transfer the good rather than as an additional promised service. It should not be applied by analogy to other type of activities such as custodial or storage services, which may be considered separate performance obligations in accordance with ASC 606-10-25-17 or immaterial in the context of the contract in accordance with ASC 606-10-25-16A. You have one performance obligation and revenue is not recognized until control is passed to the customer (as noted in the post). ... Free shipping in... 2 - IFRS 15 mit SAP Revenue Accounting and Reporting, Brand New, Free shipping … (IFRS 15 & ASC 606: 606-10-25-1 THROUGH 25-13) a) A contract is an agreement between 2 parties that creates enforceable rights and obligations. Either people feel that this is A CHALLENGE and they ask me how IFRS 15 can possibly affect them; OR 19. $3 Allowed tags:
Add a new comment: This blog shares our insights and conversations about accounting, auditing, and training matters. Hope it helps! those steps are. Apr 23, 2019 at 11:14 AM. IFRS 15 will change the way many retailers and wholesalers account for their contracts. 942 0 obj <>stream The accounting policy election provided by ASU 2016-10 is to be applied consistently to similar types of transactions. When control of the goods takes place after shipment (destination terms), are the fulfillment costs classified in cost of sales or within selling and marketing expenses? What about past practice of replacing stolen and broken goods? IFRS 15 requires an entity to assess the goods or services promised in a contract to identify the performance obligations in that contract. Contact us International Accounting Standards Board 30 Cannon Street London EC4M 6XH United Kingdom Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 E-mail: info@ifrs.org Website: www.ifrs.org: Future IASB meetings The IASB meets at least once a month for up to five days. Midlothian, Virginia 23114, PH + 1 (804) 897-0608 Outside a lack of technology, part of the challenge is also interpreting the rules. Do shipping terms (FOB shipping point vs destination) principally determine the timing of control transfer or other/additional factors must also be considered, shipping terms notwithstanding? Under IFRS 15, the accounting treatment is the same if both books are delivered at the same time. IFRS 15 The IASB has proposed amendments to IFRS 15 in some of the areas discussed by the TRG. IFRS in Practice 20202021 IFRS 15 Revenue from Contracts with Customers 5 In step 3 a vendor determines the transaction price of each contract identified for accounting purposes in step 1, and … One follow up question I was hoping you could clarify. So this feels like the right time to . Clarifications to IFRS 15 Revenue from Contracts with Customers is issued by the International Accounting Standards Board® (the Board). IFRS 15 includes specific requirements related to “customer options for additional goods or services” and requires a distinction to be made as to whether this option confers a “material right”. Thanks, Mike Walworth, CPA: Disclaimer: the Board, the IFRS® Foundation, the authors … For more information visit www.ifrs.org Page 1 of 3 1. The IASB decided to not make a similar amendment to IFRS 15. In this post, we’ll cover the accounting for shipping and handling activities, specifically whether they should be treated as separate performance obligations. … In a previous post, we covered identifying performance obligations in the contract, which is step 2 of the new 5-step model within ASC 606. Ashish Agarwal: If your business is not a freight or shipping business (which I suspect it isn't) then what you are really talking about is shipping and handling costs. IFRS 15 is the New Revenue standard issued by IASB to replace the IAS 18 and IAS 11. Follow-up question: What if control of the promised goods transfers to the customer after the shipping and handling activities are performed? As a result, Larry’s Loudspeakers would have to make an accounting policy election to account for shipping and handling either as a fulfillment cost or as a separate performance obligation. , our IFRS Newsletter brings you the latest insights and updates from GAAP. 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