Time’s up! AASB 15, the new revenue standard is here. Are you ready?

Time’s up! AASB 15, the new revenue standard is here. Are you ready?

If the application of AASB 15 requires a revised revenue recognition model, revenue based measures, such as performance based bonuses, bank covenants and earn out clauses, will be substantially impacted.

The application of AASB 15 may have tax impacts in both the short term and long term and effective tax planning should be given consideration when structuring future or restructuring current contracts.
There are also practical issues to consider, including whether your accounting system can accommodate the change, which employees will need training and what transitional approach would provide the most effective results, to name a few.

Throughout this time expectations of the users of the financial information must be managed as significant changes in revenue may be interpreted as a result of alternative circumstances.
Whilst some entities may not need to change their revenue recognition model and therefore may not be impacted by the aforementioned points and will see no financial impact of the implementation of this standard, entities preparing general purpose financial statements will at a minimum have to comply with increased disclosure requirements.

If your organisation requires assistance please reach out to Wali Aziz, the audit partner of Walker Wayland NSW, for advice on implementation.

Contact Wali Aziz:

Phone:+ 61 2 9951 5400

Email: Wali.Aziz@wwnsw.com.au

Article Author: Hayley Saunders