How did IFRS 15 affect the revenue recognition practices and financial statements of firms? Evidence from Australia and New Zealand

Humayun Kabir and Li Su

Journal of International Accounting, Auditing and Taxation, 2022, vol. 49, issue C

Abstract: We provide evidence on how International Financial Reporting Standard (IFRS) 15, Revenue from Contracts with Customers, affected the revenue recognition practices and financial statements of firms in Australia and New Zealand. While firms used the modified retrospective method more than the full retrospective method, the usage varied by firm size. Although the majority of sample firms (63.38%) reported that the standard had either no impact or no material impact on their financial statements, the remaining 36.62% disclosed IFRS 15 impacts in notes to financial statements. The disclosure of impacts varied by sectors and firm size. The standard did not affect the accounting for standard retail sales transactions. However, it resulted in the deferral of revenue recognition for the majority of firms whose revenue recognition was impacted by the standard. For firms that disclosed IFRS 15 impacts on financial statements, revenue was the most affected item. Cost of goods sold, contract liabilities, and profit after tax were three other most affected financial statement items. Finally, the standard affected financial statements through multiple channels.

Keywords: IFRS 15; Revenue recognition; IFRS impacts (search for similar items in EconPapers)
JEL-codes: L51 M41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951822000623
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:49:y:2022:i:c:s1061951822000623

DOI: 10.1016/j.intaccaudtax.2022.100507

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().