IFRS 15 was created to eliminate the inconsistent ways that businesses handled transaction accounting. Without standardized financial reporting, investors and other parties interested in financial statements found it difficult to compare results within a specific industry as well as across different industries.
IFRS 15 created a uniform way of recognizing revenue and standardized reporting across the board. This consistent reporting method has improved comparative reporting and analysis and has simplified how financial statements are prepared.
You may already have an individual on your team that takes care of the day-to-day bookkeeping financials. While it's great to have someone on board who you can trust with the daily financial duties, what about the more complicated aspects of finances like taxation, financial planning, forecasting, and troubleshooting? For these kinds of things, it's necessary to have someone with the relevant qualifications and experience. Hiring a Chief Finance Officer (CFO) is the best way to ensure you gain the right expertise and take your finances to the next level.
Most simple financial transactions involve a customer requesting goods or a service and paying for them immediately. This is an easy accounting process when recording the transaction as revenue.
But, what happens when there are complex, high-value contracts at play? These types of contracts typically involve delayed payment or payment in installments. This begs the question, "when and how can they be recorded as revenue?".