FACULTY OF BUSINESS

ACCOUNTING SCHOOL

ACADEMIC REPORT
IFRS 15 Study
COURSE:
Accoun琀椀ng
COURSE NAME
Senior Accoun琀椀ng

AUTHOR:
Victor Manuel, Piñarreta Atoche

SURNAME, NAMES
Piñarreta Atoche, Victor Manuel

TEACHER:
Inga Vilchez, Roman

SURNAME, NAMES
Inga Vilchez, Roman

Headquarters - Peru

(2023)

1
INDEX

INDEX...........................................................................................................................................2
 INTRODUCTION...............................................................................................................3
● DEVELOPMENT....................................................................................................................4
WHAT IS IFRS 15?.........................................................................................................................4
IFRS 15 OBJECTIVE.......................................................................................................................4
● FULFILLMENTOR OBJECTIVE................................................................................................4
● SCOPE...................................................................................................................................4
● RECOGNITION......................................................................................................................5
● CONTRACT COMBINATION..................................................................................................5
● MODIFICATIONS TO THE CONTRACT...................................................................................6
● IFRS 15 WARRANTY TYPES...................................................................................................6
● IMPORTANCE OF IFRS 15.....................................................................................................7
● CONCLUSION........................................................................................................................7
● REFERENCE:..........................................................................................................................8

2
  INTRODUCTION

In the following IFRS 15 research report I want to let you know what IFRS 15 is, what
IFRS 15 is, its objec琀椀ve, importance, characteris琀椀cs, its types of pro昀椀t, which is IFRS 15
tells us that IFRS 15, is a comprehensive guide on accoun琀椀ngincome and replaces the
requirements currently contained in many forms and interpreta琀椀ons. We can also say
that, for many, it can mean changes in the 琀椀ming and way income is recognized. In
some areas, change is drama琀椀c and requires careful planning, even in business.
We can 昀椀nd some objec琀椀ves in IFRS 15, one of its main objec琀椀ves in this way we can
establish certain principles of en琀椀ty where it will be applied and provided to the user of
the 昀椀nancial statements, where informa琀椀on will be very useful on the nature, amount,
opportunity and uncertainty of income and cash 昀氀ows arising from the cons of the
clients of the en琀椀ty.
We can 昀椀nd some speci昀椀c main importance in IFRS 15, they are some changes that are
related to the introduc琀椀on of IFRS 15 since they are very signi昀椀cant given that we have
not done anything extraordinary in this area of IFRS presenta琀椀on for listed companies
six years ago. The reform is a far-reaching reform that repeals previous rules on
income recogni琀椀on.
Second, the standard provides a uniform model for revenue recogni琀椀on of contracts
with customers. Companies cannota昀昀ord to ignore regulatory changes and implement
stricter requirements than ever before. One of the novel琀椀es of IFRS 15 is that there is
no longer a separate accoun琀椀ng standard for goods and services. Currently, the
standard focuses on the de昀椀ni琀椀on of performance obliga琀椀ons.

3
 ● DEVELOPMENT

WHAT IS IFRS 15?

According to the author (BDO, 2017), it does not say that IFRS 15 provides
comprehensive guidance on revenue accoun琀椀ng and replaces the requirements
currently contained in many standards and interpreta琀椀ons.
For many companies, this means changes in the 琀椀ming and manner in which
revenue is recognized. In some areas, the changes are drama琀椀c and require
careful planning, even for business purposes.
IFRS 15 creates a single detailed framework for determining the amount and
琀椀ming of revenue to be recognized. The ra琀椀onale is that the supplier must
recognize the proceeds from the transfer of the goods or services promised to the
customer in an amount that re昀氀ects the performance that the seller expects in

exchange for those goods or services.

IFRS 15 OBJECTIVE
According to the author, (Info, 2020), he gives us some of the objec琀椀ves of the IFRS
that tells us that
● The objec琀椀ve of this standard is to establish the principles that astandard will
apply to provide users of 昀椀nancial statements with useful informa琀椀on about
the nature, amount, 琀椀ming and uncertainty of revenues and cash 昀氀ows arising
from contracts with the en琀椀ty's customers.
● FULFILLMENTOR OBJECTIVE
To achieve the objec琀椀ve of paragraph 1, the underlying principle of the standard is
that an en琀椀ty should recognise revenue represen琀椀ng the transfer of promised goods
or services to a customer in an amount that re昀氀ectsthe considera琀椀on that the en琀椀ty
expects to receive in exchange for such goods or services. The company must consider
the terms of the contract and all relevant facts and circumstances if: This rule is valid.
Companies should apply this Code consistently, including by prac琀椀cal means, to
contracts with similar characteris琀椀cs and similar circumstances.

● SCOPE
An en琀椀ty must apply this standard to all contracts with customers except:
b) Insurance contracts in accordance with IFRS 4 Insurance Contracts.
c) 昀椀nancial instruments and other contractual rights or obliga琀椀ons in the areas of
opera琀椀on IFRS 9 Financial instruments, IFRS 10 Consolidated 昀椀nancial statements, IFRS
4
11 Joint agreements, IAS 27 Separate 昀椀nancial statements and IAS 28 Investments in
associates and joint ventures and
(d) Non-cash transac琀椀ons between units in the same industry to facilitate salesto
customers or prospects.

IDENTIFICATION OF THE CONTRACT

Companies should describe their agreements with customers that are within the
standard. Only if all of the following condi琀椀ons are true:

a) The contrac琀椀ng par琀椀es have con昀椀rmed the contract (wri琀琀en, orally or in accordance
with other tradi琀椀onal business prac琀椀ces) and undertake to comply with their
respec琀椀ve contractual rules.

(b) The en琀椀ty may iden琀椀fy the rights of eachparty in the goods or services transferred.

(c) En琀椀琀椀es may specify payment terms associated with goods or services o昀昀ered for
sale. transi琀椀on; (d) the contract is commercially reasonable (i.e., the risk,
opportunityor contract changes the amount of the en琀椀ty's future cash 昀氀ows);

(e) En琀椀琀椀es may receive considera琀椀on in exchange for the right to deliver goods or
services to customers.

● CONTRACT COMBINATION
An en琀椀ty mayconclude two or more agreements concluded at approximately the same
琀椀me with the same customer (or customer-related par琀椀es) and treat them as a single
agreement if one or more of the following condi琀椀ons are met: The following must be
accounted for:

(a) Contracts as complex transac琀椀ons with a single economic purpose

(b) The amount of considera琀椀on paid in a contract depends on the price or

performance of the other contrac琀椀ng par琀椀es. All

(c) The goods or services promised in the contract (or part of the goods or services
promised in each contract) cons琀椀tute performance obliga琀椀ons and paragraphs 22 to
30)

5
 ● MODIFICATIONS TO THE CONTRACT
A concerta琀椀on modi昀椀ca琀椀on is a change in the scope or quan琀椀ty (or both) of the
contract that is approved by both par琀椀es. In some industries and jurisdic琀椀ons, a
change in a contract may be called an order of varia琀椀on, devia琀椀on, or amendment.
The contract is modi昀椀ed in the event that the par琀椀es agree on changes that create new
rights and obliga琀椀ons applicable in the agreement or changes in exis琀椀ng rights and
obliga琀椀ons. Changes to the contract may be in wri琀椀ng, con昀椀rmed by oral agreement or
implied by customary business prac琀椀ces. If the par琀椀es to the contract do not agree to
the changes, the company will con琀椀nue to apply this rule to the exis琀椀ng contract un琀椀l
the changes are approved.

● IFRS 15 WARRANTY TYPES

According to the author, (Dominguez, 2021), he tells us that IFRS 15 hassome types of
guarantees.
1. Assurance type guarantee: These relate to the customer's guarantee that the
delivered product will work as agreed. These guarantees do not create a
separate performance obliga琀椀on and should be accounted forin accordance
with IAS 37. Therefore, suppliers recognize provisions for expected costs
associated with mee琀椀ng their warranty obliga琀椀ons.
example:

ABC sells TVs at S/5000, with a 1-year warranty as is industry standard. Within 1 year,
ABC must respond for any customer damage, provided that the damage is factory-
made. Companies must make best es琀椀mates based on historical informa琀椀on to record
collateral reserves.
2. Service-type warranty: That relate to addi琀椀onal services and provide customers
with assurance that products will meet agreed speci昀椀ca琀椀ons over 琀椀me are
considered separate performance obliga琀椀ons that must be quoted Transac琀椀ons
according to IFRS 15.
example:
ABC sells the TV at S/5,000 with extended warranty for a total of S/5,400, the
normal warranty is 1 year and can be extended for another year by purchasing
the extended warranty. ABC must account for the sale of the asset and the
extended guaranteeas a separate performance obliga琀椀on. Proceeds from the
sale of televisions are recognized immediately upon delivery of the goods.
Proceeds from the sale of extended warran琀椀es are recognized during the
warranty period.
The accoun琀椀ng material is as follows:

6
Cash (debit) 5,400

Contractual liabili琀椀es (credit) 400

Ordinary income (credit) 5,000

● IMPORTANCE OF IFRS 15
According to the author, (RSM, 2018), it describes the speci昀椀c importance of IFRS 15.
The changes related to the introduc琀椀on of IFRS 15 are very signi昀椀cant given that
nothing extraordinary has been done in this area since the introduc琀椀on ofIFRS for
listed companies six years ago.

This reform is a momentous reform that eliminates previous income recogni琀椀on

standards. The standard then proposes a uniform format for the recogni琀椀on of
revenue fromcontracts with customers. Companies cannot a昀昀ord to ignore regulatory
changes, imposing stricter requirements than ever before.
One of the novel琀椀es of IFRS 15 is that there is no longer an accoun琀椀ng standard for
separa琀椀ng goods and services. The standard currently focuses on iden琀椀fying
performance obliga琀椀ons.

7
● CONCLUSION

● In conclusion, we can say that IFRS 15 is a comprehensive guide for accoun琀椀ng

since it is some income and replaces the requirements currently contained in
many standards and interpreta琀椀ons. Since IFRS 15 creates a single detailed
framework for determiningthe amount where income can be recognized.
Where the supplier must recognize the income for the transfer of the goods or
services where they are promised to the client in a re昀氀ected amount. For many
companies, this meanschanges in when and how revenue is recognized.
● We can say that IFRS 15 has some speci昀椀c objec琀椀ve since in this way we can
de昀椀ne or apply the principles of the en琀椀ty since it will be able to provide
certain useful informa琀椀on to users.

8
● REFERENCE:

Dominguez, L. (2021 9). Types of guarantees according to IFRS 15.

Linkedin.com. h琀琀ps://www.linkedin.com/pulse/琀椀pos-de-garant

%C3%ADas-seg%C3%BAn-la-niif-15-leenin-k-dominguez-soto?

originalSubdomain=es

Info, N. (2020, May 20). IFRS 15 - Revenue from ordinary ac琀椀vi琀椀es from

contracts with customers. NIIF.INFO. h琀琀ps://niif.info/niif/niif-15/

IFRS 15 REVENUE FROM ORDINARY ACTIVITIES FROM CONTRACTS WITH

CUSTOMERS. (n.d.). Gob.pe. Retrieved April 22, 2023, from h琀琀ps://

www.mef.gob.pe/contenidos/conta_publ/con_nor_co/vigentes/niif/NIIF

15_2014_v12112014.pdf

Peru, B. D. O. (September 18, 2017). IFRS 15 - Revenue from Contracts with

Customers. Com.pe.

h琀琀ps://www.bdo.com.pe/es-pe/servicios/auditoria/diagnos琀椀co-e-

implementacion-de-niif/niif-15-ingresos-de-contratos-con-clientes

Peru, R. S. M. (2018, November 28). What is IFRS 15 and why is it important?

RSM Peru.

h琀琀ps://www.rsm.global/peru/es/aportes/blog-rsm-peru/que-es-la-niif-

15-y-por-que-es-importante