To unify and harmonize the different policies and terminology related to revenue reporting for customers with contracts, IASB and FASB introduced the 5-step model. The overarching principal was that companies must recognize revenue when goods and services are transferred to a customer, in an amount that is proportionate to what has been delivered at that point. All companies, both public and private, are required to prepare their revenue contracts in compliance with IFRS 15 and ASC 606.
One Framework for financial reporting,
eliminating inconsistencies in principles between
different accounting bords.
Improved and clarified guidance for multiple-element agreements.
New guidance for transactions that were lacking
comprehensive guidance - such us service
revenue and contract modifications.
Simpler, clearer path to compliance for all businesses.
The IFRS 15 revenue has only five steps, which looks simple at first.
step 1
Identification of contract
step 2
Identification of obligation
step 3
Price for transaction
step 4
Allocation of transaction for obligation
step 5
Recognition of revenue.
But your revenue data will need to be reprocessed from the start
hamilton's industry-specific use cases
Certain industries are impacted by these regulations more than others. Hamilton is preconfigured to automate revenue accounting and recognition in multiple use cases across industries.
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