VALUE IFRS Plc

Illustrative IFRS 15 disclosures

December 2015

This publication illustrates the types of disclosures that would be required if a fictitious company,
VALUE IFRS Plc, had decided to adopt IFRS 15 Revenue from Contracts with Customers for its reporting
period ending 31 December 2015. Supporting commentary is also provided. The publication complements our
VALUE IFRS Plc publication which is available from www.pwc.com/ifrs.

The publication is for illustrative purposes only and should be used in conjunction with the relevant financial
reporting standards and any other reporting pronouncements and legislation applicable in specific
jurisdictions.

Global Accounting Consulting Services

PricewaterhouseCoopers LLP

This content is for general information purposes only, and should not be used as a substitute for
consultation with professional advisors.
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IFRS 15 Revenue from contracts with customers

IFRS 15 was first issued in May 2014 and amended in September 2015 to defer the effective date to 1
January 2018. Further amendments have been proposed in ED/2015/6 Clarifications to IFRS 15,
however, the standard can still be applied early where permitted by the entitys local jurisdiction.
This document illustrates the types of disclosures that would be required if our fictional company,
VALUE IFRS Plc, decided to first apply IFRS 15 for its reporting period ending 31 December 2015.
Other circumstances might require additional disclosures that are not applicable to VALUE IFRS Plc.
These are explained in the commentary at the end of this document. The disclosures in this document
must be read in the context of the assumptions set out below. Different facts and circumstances could
result in different measurements and classifications. Footnote references point to additional
commentary at the end of this document.
Assumptions made
In compiling these illustrative disclosures, we have made the following assumptions:

IAS1(10)(b),(10A)

VALUE IFRS Plc has applied IFRS 15 for the first time in the 2015 financial report (initial
application date: 1 January 2015) and has chosen a full retrospective application of IFRS 15 in
accordance with IFRS 15.C3(a) without using the practical expedients for completed contracts in
IFRS 15.C5(a) and (b).

The adoption of IFRS 15 required changes in the groups accounting policies and affected the
recognition, measurement and presentation of certain amounts recognised in the statement of
profit or loss and the balance sheet. See note 26 for explanations.

The group does not incur material costs to obtain contracts with customers such as sales
commissions.

Disclosures required under other standards such as IFRS 7 that could be necessary (for example,
for receivables arising from contracts with customers) are not illustrated.

The effect of the adoption of IFRS 15 on the line items in the balance sheet has been illustrated
but not all of the disclosures that are required following a change in accounting policy have been
provided. For an illustration of the disclosures that are required for changes in accounting policies,
please refer to Appendix C of our Value IFRS Plc 2015 publication which shows a change in
accounting for bearer plants (Biological assets).

Tentative changes proposed to IFRS 15 by ED/2015/6 have not been considered.

A change in the fact pattern such that the furniture retail business has been operating since 1
January 2014 rather than 1 January 2015 as per our annual publication; this allowed us to
demonstrate a change in accounting for the customer loyalty programme.

Consolidated statement of profit or loss (extract)

IAS1(51)(c),(e)
IAS1(113)

Notes

2015
CU000

2014
Restated *
CU000

Continuing operations
IAS1(82)(a)

IAS1(10)(a),(54)

Revenue

204,890

148,680

Consolidated balance sheet

Notes

31 Dec 2015
CU000

31 Dec 2014
Restated *
CU000

1 Jan 2014
Restated *
CU000

Trade and other receivables

7(a)

17,388

9,587

6,346

Contract assets

3(b)

1,859

3,117

1,897

3(b)

4,327

3,560

2,734

IAS1(51)(c),(e)
IAS1(113)

ASSETS

IAS1(60),(66)

Current assets
IAS1(54)(h)
IFRS7(8)(c)

Current liabilities

IAS1(60),(69)

Contract liabilities

IAS1(54)(n)

PwC

See note 26 for details about changes in accounting policies

VALUE IFRS Plc

2
31 December 2015 2015

IFRS 15

3
IFRS15(113)

Revenue from contracts with customers 1,9

The group has recognised the following amounts relating to revenue in the statement of profit or loss:
2014
2015 Restated *
CU000
CU000

Notes

Disaggregation of revenue from contracts with customers 2,3

The group derives revenue from the transfer of goods and services over time and at a point in time in
the following major product lines and geographical regions:
Furniture
manufacture

2015
IFRS15(115)
IFRS8(23)(b)
IFRS8(23)(a),(28)(a)

IFRS15(B87)-(B89)

Segment revenue
Inter-segment
revenue
Revenue from
external customers
Timing of revenue
recognition
At a point in time
Over time

Furnitureretail

2014

IFRS15(B87)-(B89)

PwC

Segment revenue
Inter-segment
revenue
Revenue from
external customers
Timing of revenue
recognition
At a point in time
Over time

IT Consulting

Electronic
equipment

Oneland
CU000
55,100

China
CU000
35,100

Oneland
CU000
31,600

US
CU000
33,300

Europe
CU000
16,900

Oneland
CU000
13,850

All other
segments
CU000
16,600

Total
CU000
202,450

(1,200)

(700)

(900)

(800)

(300)

(500)

(400)

(4,800)

53,900

34,400

30,700

32,500

16,600

13,350

16,200

197,650

53,900
-

34,400
-

30,700
-

1,000
31,500

600
16,000

13,350
-

16,200
-

150,150
47,500

53,900

34,400

30,700

32,500

16,600

13,350

16,200

197,650

All other
segments
CU000
10,400

Total
CU000
145,000

Furniture manufacture

IFRS15(115)

141,440
7,240
148,680

See note 26 for details about changes in accounting policies

(a)
IFRS15(114)

197,650
7,240
204,890

(a)
8(b)

Revenue from contracts with customers

Revenue from other sources: Rental and sub-lease rental income
Total revenue

IFRS15(113)(a)

Furnitureretail

IT Consulting

Electronic
equipment

Oneland
CU000
60,350

China
CU000
22,560

Oneland
Restated
CU000
14,300

US
CU000
22,600

Europe
CU000
14,790

(1,150)

(800)

(300)

(600)

(610)

(100)

(3,560)

59,200

21,760

14,000

22,000

14,180

10,300

141,440

59,200
-

21,760
-

14,000
-

800
21,200

500
13,680

10,300
-

106,560
34,880

59,200

21,760

14,000

22,000

14,180

10,300

141,440

Oneland
CU000

VALUE IFRS Plc

3
31 December 2015 2015

IFRS 15

(b)
IFRS15(116)(a)

Contract assets and liabilities

The group has recognised the following revenue-related contract assets and liabilities
31 Dec
2015
CU000

31 Dec
2014*
CU000

1 Jan
2014 *
CU000

(b)(i),(c(iv)
(b)(iv)

1,547
312
1,859

2,597
520
3,117

1,897
1,897

(b)(i),(c)(i)
(c)(i),(ii)
(c)(iii)
(b)(iii),(c)(iv)

350
145
2,402
1,430
4,327

125
110
2,336
989
3,560

100
179
2,250
205
2,734

Notes
IAS1(77)

Contract assets relating to IT consulting contracts

Asset recognised for costs incurred to fulfil contracts
Total contract assets

IAS1(77)

Contract liability expected volume discounts

Contract liability expected refunds to customers
Contract liabilities customer loyalty programme
Contract liabilities IT consulting contracts
Total contract liabilities

IAS1(77)
IAS1(77)
IAS1(77)

* Reclassified and remeasured amounts see note 26 for explanations

IFRS15(118),(113)(b)

(i)
Significant changes in contract assets and liabilities
Contract assets have decreased as the group has provided fewer services ahead of the agreed
payment schedules for fixed-price contracts. There was also an impairment write-down of CU77,000
recognised in relation to the asset for costs to fulfil contracts, see (iv) for further information.
Contract liabilities for expected volume discounts and IT consulting contracts have increased by
CU473,000 following the acquisition of VALUE IFRS Electronics Group, see note 14.
(ii)
Revenue recognised in relation to contract liabilities
The following table shows how much of the revenue recognised in the current reporting period relates
to carried-forward contract liabilities and how much relates to performance obligations that were
satisfied in a prior year.

Revenue recognised that was included in the contract liability

balance at the beginning of the period
IT consulting contracts
Customer loyalty programme
Revenue recognised from performance obligations satisfied in
previous periods
Consideration from furniture wholesale contract, not previously
recognised due to the constraint, see c(i) below.

IFRS15(116)(b)

IFRS15(116)(c)

31 Dec 2015
CU000

31 Dec
2014
Restated
CU000

230
190

178
272 *

150

See note 26 for details about changes in accounting policies

(iii) Unsatisfied long-term consulting contracts

The following table shows unsatisfied performance obligations resulting from fixed-price long-term IT
consulting contracts.
31 Dec 2015 31 Dec 2014 *
CU000
CU000
Aggregate amount of the transaction price allocated to long-term IT
consulting contracts that are partially or fully unsatisfied as at 31
December

IFRS15(120)

8,881

-*

IFRS15(C5)(c),(C6)

IFRS15(120)(b),(122)

Management expects that 60% of the transaction price allocated to the unsatisfied contracts as of 31
December 2015 will be recognised as revenue during the next reporting period (CU 5,328,000). The
remaining 40% (CU 3,553,000) will be recognised in the 2017 financial year. The amount disclosed
above does not include variable consideration which is constrained.

PwC

As permitted under the transitional provisions in IFRS 15, the transaction price allocated to (partially) unsatisfied performance
obligations as of 31 December 2014 is not disclosed.

VALUE IFRS Plc

4
31 December 2015 2015

IFRS 15

(b)
IFRS15(121),(122)

Contract assets and liabilities (continued)

All other IT consulting contracts are for periods of one year or less or are billed based on time
incurred. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is
not disclosed.
(iv) Assets recognised from costs to fulfil a contract
In addition to the contract balances disclosed above, the group has also recognised an asset in
relation to costs to fulfil a long-term IT contract. This is presented within contract assets in the balance
sheet.

Asset recognised from costs incurred to fulfil a contract at 31 December

Amortisation and impairment loss recognised as cost of providing
services during the period

IFRS15(128)

31 Dec
2015
CU000
312

31 Dec
2014 *
Restated
CU000
520

208

131

See note 26 for details about changes in accounting policies

IFRS15(127)

In adopting IFRS 15, the group recognised an asset in relation to costs incurred in developing an IT
platform that is used to fulfil an IT consulting fixed-price contract. These costs had been expensed as
incurred in 2014, see note 26(iii) for further explanations. The asset is amortised on a straight-line
basis over the term of the specific contract it relates to, consistent with the pattern of recognition of
the associated revenue. Due to an increase in expected costs by 30% in the financial year 2015,
management does not expect the capitalised costs to be completely recovered. An impairment loss of
CU77,000 has therefore been recognised for the excess of the capitalised cost over the expected
remaining consideration less any directly related costs not yet recognised as expense.

IFRS15(119)

(c)

IFRS15(119)(a),(c)
IFRS15(123)(a),(125)

Accounting policies and significant judgements

(i)
Sale of goods - wholesale
The group manufactures and sells a range of furniture and electronic equipment in the wholesale
market. Sales are recognised when control of the products has transferred, being when the products
are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to sell
the products, and there is no unfulfilled obligation that could affect the wholesalers acceptance of the
products. Delivery occurs when the products have been shipped to the specific location, the risks of
obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has
accepted the products in accordance with the sales contract, the acceptance provisions have lapsed,
or the group has objective evidence that all criteria for acceptance have been satisfied.

IFRS15(119)(b),(d)
(123)(b),(126)

The furniture is often sold with volume discounts based on aggregate sales over a 12 months period.
Revenue from these sales is recognised based on the price specified in the contract, net of the
estimated volume discounts. Accumulated experience is used to estimate and provide for the
discounts, using the expected value method, and revenue is only recognised to the extent that it is
highly probable that a significant reversal will not occur. A contract liability is recognised for expected
volume discounts payable to customers in relation to sales made until the end of the reporting period.
No element of financing is deemed present as the sales are made with a credit term of 30 days, which
is consistent with market practice. The groups obligation to provide a refund for faulty products under
the standard warranty terms is recognised as a provision, see note 8(h) for details.

IFRS15(117)

A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the payment is
due.

PwC

VALUE IFRS Plc

5
31 December 2015 2015

IFRS 15

IFRS15(119)
IFRS15(123)

IFRS15(119)(a),(c)
(123),(125)
IFRS15(117),(119)(b),(d)
(123)(b),(126)

IFRS15(119)(a),(c)
(123),(125)

(c)

Accounting policies and significant judgements (continued)

Critical judgements in recognising revenue

The group has recognised revenue amounting to CU2,950,000 for sale of furniture to a wholesale
customer in December 2015. The buyer has the right to rescind the sale if there is 5%
dissatisfaction with the quality of the first 100 pieces of furniture sold. This specific concession was
made because this is a new product line specifically designed for this customer. However,
consistent with other contracts, the group does not have a right to payment until the furniture has
been delivered to the customer. Based on the quality assurance system implemented, the group is
confident that the quality of the product is such that the dissatisfaction rate will be well below 5 %.
Management have determined that it is highly probable that there will be no rescission of the
contract and a significant reversal in the amount of revenue recognised will not occur. It is therefore
appropriate to recognise revenue on this transaction during 2015 as control of the product is
transferred to the customer. The profit recognised for this sale was CU1,625,000. The group would
suffer an estimated pre-tax loss of CU1,760,000 in its 2016 financial statements if the sale is
cancelled (CU1,625,000 for the reversal of 2015 profits and CU135,000 of costs connected with
returning the stock to the warehouse).
In 2014, the group did not recognise revenue of CU280,000 in relation to a wholesale contract with
volume discounts for a new customer and new product line. The group did not have any experience
with the customers purchase pattern and the product line. Management therefore determined that it
was not highly probable that a portion of the revenue will not reverse. Of the CU280,000 of revenue
not recognised in 2014, CU150,000 was recognised in the current financial year based on the actual
volume sold for the contract period, see (b)(ii) above.
(ii)
Sale of goods retail
The group operates a chain of retail stores selling household furniture. Revenue from the sale of
goods is recognised when a group entity sells a product to the customer.
Payment of the transaction price is due immediately when the customer purchases the furniture. It is
the groups policy to sell its products to the end customer with a right of return within 28 days.
Therefore, a contract liability (refund liability) and a right to the returned goods (included in other
current assets) are recognised for the products expected to be returned. Accumulated experience is
used to estimate such returns at the time of sale at a portfolio level (expected value method).
Because the number of products returned has been steady for years, it is highly probable that a
significant reversal in the cumulative revenue recognised will not occur. The validity of this
assumption and the estimated amount of returns are reassessed at each reporting date.
(iii) Sale of goods customer loyalty programme
The group operates a loyalty programme where retail customers accumulate points for purchases
made which entitle them to discount on future purchases. Revenue from the award points is
recognised when the points are redeemed or when they expire 12 months after the initial sale.

IFRS15(123)
(126)(c)

Critical judgements in allocating the transaction price

IFRS15(119)(b),(d)
(123)(b),(126)

The points provide a material right to customers that they would not receive without entering into a
contract. Therefore, the promise to provide points to the customer is a separate performance
obligation. The transaction price is allocated to the product and the points on a relative stand-alone
selling price basis. Management estimates the stand-alone selling price per point on the basis of the
discount granted when the points are redeemed and on the basis of the likelihood of redemption,
based on past experience.
The stand-alone selling price of the product sold is estimated on the basis of the retail price.
Discounts are not considered as they are only given in rare circumstances.

IFRS15(117)

PwC

A contract liability is recognised until the points are redeemed or expire.

VALUE IFRS Plc

6
31 December 2015 2015

IFRS 15

IFRS15(119)

IFRS15(119)(a),(c)
(124),(125)

IFRS15(22),(73),(79)

(c)

Accounting policies and significant judgements (continued)

(iv) IT Consulting services

The IT consulting division provides business IT management, design, implementation and support
services. Revenue from providing services is recognised in the accounting period in which the
services are rendered. For fixed-price contracts, revenue is recognised based on the actual service
provided to the end of the reporting period as a proportion of the total services to be provided. This is
determined based on the actual labour hours spend relative to the total expected labour hours.
Some contracts include multiple deliverables, such as the installation of hardware and software. In
most cases, the installation is simple, does not include an integration service and could be performed
by another party. It is therefore accounted for as a separate performance obligation. In this case, the
transaction price will be allocated to each performance obligation based on the stand-alone selling
prices. Where these are not directly observable, they are estimated based on expect cost plus
margin. . If contracts include the installation of hardware, revenue for the hardware is recognised at a
point in time when the hardware is delivered, the legal title has passed and the customer has
accepted the hardware.

IFRS15(119)(b),(d)
(123)(b),(126)

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances
change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or
loss in the period in which the circumstances that give rise to the revision become known by
management.

IFRS15(117)

In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If
the services rendered by VALUE IFRS Plc exceed the payment, a contract asset is recognised. If the
payments exceed the services rendered, a contract liability is recognised.
If the contract includes an hourly fee, revenue is recognised in the amount to which VALUE IFRS Plc
has a right to invoice. Customers are invoiced on a monthly basis and consideration is payable when
invoiced.

AASB15(117).(B16)

IFRS15(123)
(126)(c)

Critical judgements in allocating the transaction price

Some fixed-price IT support contracts include an allowance for one free of charge hardware
replacement per contract period up a specified value. Because these contracts include two
performance obligations, the transaction price must be allocated to the performance obligations on a
relative stand-alone selling price basis.
Management estimates the stand-alone selling price at contract inception based on observable
prices of the type of hardware likely to be provided and the services rendered in similar
circumstances to similar customers. If a discount is granted, it is allocated to both performance
obligations based on their relative stand-alone selling prices.

IFRS15(119)(a),(c)
(123),(125)

IFRS15(119)(b),(d)
(123)(b),(126).(129).(63)
IFRS15(117)

IFRS15(129),(63)

PwC

(v)
Land development and resale
The group develops and sells residential properties. Revenue is recognised when control over the
property has been transferred to the customer. The properties have generally no alternative use for
the group due to contractual restrictions. However, an enforceable right to payment does not arise
until legal title has passed to the customer. Therefore, revenue is recognised at a point in time when
the legal title has passed to the customer.
The revenue is measured at the transaction price agreed under the contract. In most cases, the
consideration is due when legal title has been transferred. While deferred payment terms may be
agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is
therefore not adjusted for the effects of a significant financing component.
(vi) Financing components
The group does not expect to have any contracts where the period between the transfer of the
promised goods or services to the customer and payment by the customer exceeds one year. As a
consequence, the group does not adjust any of the transaction prices for the time value of money.

VALUE IFRS Plc

7
31 December 2015 2015

IFRS 15

12 Financial risk management (extract)

IFRS7(20)(e)

IFRS7(20)(e)

IFRS15(113)(b)

IAS1(117)

IAS1(112)(a),(117)

IAS8(28)(b),(d)
IFRS15(C3)

IAS1(119)

(c)

Credit risk (extract)

(iv)

Impaired trade receivables (extract)

Amounts recognised in profit or loss

During the year, the following gains/(losses) were recognised in profit or loss in relation to impaired
receivables.
2015
2014
CU000
CU000
Impairment losses
(200)
- individually impaired receivables
(130)
(580)
- movement in provision for impairment
(540)
Reversal of previous impairment losses

35

125

Of the above impairment losses, CU739,000 (2014 CU647,000) relate to receivables arising from
contracts with customers (see note 3).

25 Summary of significant accounting policies (extract)

(a)

Basis of preparation (extract)

(iii) New and amended standards adopted by the company

The group has elected to apply IFRS 15 Revenue from Contracts with Customers as issued in May
2014. In accordance with the transition provisions in IFRS 15 the new rules have been adopted
retrospectively and comparatives for the 2014 financial year have been restated. See note 26 below
for further details on the impact of the change in accounting policy.
(e)

Revenue recognition

The accounting policies for the groups main types of revenue are explained in note 3.

26 Changes in accounting policies 4-7,9

IAS8(28)(c)

As indicated in note 25(a) above, the group has adopted IFRS 15 as issued in May 2014, which
resulted in changes in accounting policies and adjustments to the amounts recognised in the financial
statements. The main changes are explained below.
(i)
Accounting for refunds
When the customer has a right to return the product within a given period, the group previously
recognised a provision for returns which was measured on a net basis at the margin on the sale
(CU100,000 at 31 December 2013 and CU72,000 at 31 December 2014). Revenue was adjusted for
the expected value of the returns and cost of sales were adjusted for the value of the corresponding
goods expected to be returned.
Under IFRS 15, if the customer returns a product, the entity is obliged to refund the purchase price.
Therefore, a gross contract liability (refund liability) for the expected refunds to customers is
recognised as adjustment to revenue (CU179,000 at 1 January 2014 and CU110,000 at 31 December
2014). At the same time, VALUE IFRS Plc has a right to recover the product from the customer where
the customer exercises his right of return and recognises an asset and a corresponding adjustment to
cost of sales (CU79,000 at 1 January 2014 and CU38,000 at 31 December 2014). The asset is
measured by reference to the former carrying amount of the product. The costs to recover the
products are not material because the customer usually returns the product in a saleable condition at
the store.
To reflect this change in policy, the group reclassified CU100,000 from provisions to contract liabilities
of CU179,000 and contract assets of CU79,000 at 1 January 2014 (CU72,000 from provisions to
contract liabilities of CU110,000 and contract assets of CU38,000 as at 31 December 2014).

PwC

VALUE IFRS Plc

8
31 December 2015 2015

(ii)
Accounting for customer loyalty programme
In previous reporting periods, the consideration received from the sale of goods was allocated to the
points and the goods sold using the residual method. Under this method, a part of the consideration
equalling the fair value of the points was allocated to the points. The residual part of the consideration
was allocated to the goods sold.
Under IFRS 15, the total consideration must be allocated to the points and goods based on the
relative stand-alone selling prices. Using this new method, the amounts allocated to the goods sold
are, on average, higher than the amounts allocated under the residual value method. As a
consequence, the contract liability recognised in relation to the customer loyalty programme on 1
January 2014 (CU2,250,000) was CU40,000 lower than the amount recognised as deferred revenue
under the previous policy, with a corresponding adjustment in retained earnings. Revenue for 2014
increased by CU6,000 and the restated contract liability at 31 December 2014 was CU34,000 lower
than the amount previously recognised as deferred revenue. Retained earnings increased by
CU34,000 as a consequence.
(iii)

Accounting for costs to fulfil a contract

In 2014, costs amounting to CU 520,000 related to data transfer for the set-up of an IT platform
relating to a long term IT contract were expensed as they did not qualify for recognition as an asset
under any of the other accounting standards. However, the costs relate directly to the contract,
generate resources used in satisfying the contract and are expected to be recovered. They were
therefore capitalised as costs to fulfil a contract following the adoption of IFRS 15 and included in
contract assets in the balance sheet as at 31 December 2014.
(iv) Presentation of contract assets and contract liabilities 8
Value IFRS Plc has also voluntarily changed the presentation of certain amounts in the balance sheet
to reflect the terminology of IFRS 15:

Contract assets recognised in relation to IT consulting contracts were previously presented as

part of trade and other receivables (CU 1,897,000 as at 1 January 2014 and CU 2,597,000 at 31
December 2014).

Contract liabilities in relation to expected volume discounts and refunds to customers were
previously presented as current provisions (CU 200,000 as at 1 January 2014 and CU 197,000 at
31 December 2014).

Contract liabilities in relation to IT consulting contracts were previously included in trade and
other payables (CU 205,000 as at 1 January 2014 and CU 989,000 at 31 December 2014).

Contract liabilities in relation to the customer loyalty programme were previously presented as
deferred revenue, see (ii) above.
In summary, the following adjustments were made to the amounts recognised in the balance sheet at
the date of initial application (1 January 2014 ) and at the end of the comparative period
(31 December 2014):

Notes
Trade and other receivables
Other current assets
Contract assets
Contract liabilities

IAS 18 carrying
amount
31 Dec 2013
CU000

Remeasurements

CU000

CU000

IFRS 15 carrying
amount
1 January 2014
CU000

Retained
earnings effect
1 January 2014
CU000

(iv)

8,243

(1,897)

6,346

(i)

79

79

(iv)

1,897

1,897

(i),(ii),(iv)

2,655

79

2,734

40

Deferred revenue

(ii)

2,290

(2,250)

(40)

Trade and other payables

(iv)

12,930

(205)

12,725

Provisions

(iv)

730

(200)

530

31 Dec 2014
CU000
Trade and other receivables
Other current assets
Contract assets

PwC

Reclassification

CU000

31 December
2014
CU000

CU000

31 December
2014
CU000

(iv)

12,184

(2,597)

9,587

(i)

38

38

(iii, iv)

2,597

520

3,117

520

Contract liabilities

(i),(ii),(iv)

3,522

38

3,560

Deferred revenue

(ii),(iv)

2,370

(2,336)

(34)

34

Trade and other payables

(iv)

12,477

(989)

11,488

Provisions

(iv)

1,240

(197)

1,043

VALUE IFRS Plc

9
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IFRS 15 Revenue from contracts with customers

Objectives of disclosures
IFRS15(110)

1.

IFRS15(114),
(B87)-(B89)

2.

Users of the financial statements should be given sufficient information to understand the
nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with
customers. To achieve this, entities must provide qualitative and quantitative information about
their contracts with customers, significant judgement made in applying IFRS 15 and any
assets recognised from the costs to obtain or fulfil a contract with customers.

Disaggregation of revenue

3.

4.

AASB15(115)

Entities must disaggregate revenue from contracts with customers into categories that depict
how the nature, amount, timing and uncertainty of revenue and cash flows are affected by
economic factors. It will depend on the specific circumstances of each entity as to how much
detail is disclosed. VALUE IFRS Plc has determined that a disaggregation of revenue using
existing segments and the timing of the transfer of goods or services (at a point in time vs over
time) is adequate for its circumstances. However, this is a judgement and will not necessarily
be appropriate for other entities.
Other categories that could be used as basis for disaggregation include:
(a) type of good or service (eg major product lines)
(b) geographical regions
(c) market or type of customer
(d) type of contract (eg fixed price vs time- and-materials contracts)
(e) contract duration (short-term vs long-term contracts, or
(f) sales channels (directly to customers vs wholesale)
When selecting categories for the disaggregation of revenue entities should also consider how
their revenue is presented for other purposes, eg in earnings releases, annual reports or
investors presentation and what information is regularly reviewed by the chief operating
decision makers. Where revenue is disaggregated on a basis other than reportable segments,
the entity must disclose sufficient information so users of their financial statements can
understand the relationship between the disaggregated revenue and the revenue information
that is disclosed for each reportable segment.

Disclosure of comparative information and transition requirements

IFRS15(C1)

5.

Entities must apply the revenue standard in the first interim period within annual reporting
periods beginning on or after 1 January 2018, following the decision by the IASB in July 2015
to defer the application date by one year. Earlier adoption is permitted under IFRS, but will
ultimately depend on the rules in the local jurisdiction of each reporting entity. VALUE IFRS
Plc has adopted the standard from 1 January 2015 (date of initial application).

IFRS15(C3)

6.

In the first year of applying IFRS 15, an entity has two options:
(a) It can apply the standard retrospectively to each prior reporting period presented (full
retrospective method, with restatement of comparatives and third balance sheet where
opening balances are affected) or
(b) It can apply the standard retrospectively by recognising the cumulative effect of initially
applying the standard at the date of initial application in retained earnings (simplified
transition method, no restatement of comparatives and third balance sheet required).

IFRS15(C5)

7.

An entity that elects to apply the standard using the full retrospective method can apply certain
practical expedients:
(a) For completed contracts, an entity need not restate contracts that begin and end within the
same annual reporting period.
(b) For completed contracts that have variable consideration, an entity can use hindsight and
use the transaction price at the date the contract was completed.
(c) For all reporting periods presented before the date of initial application (1 January 2015 for
VALUE IFRS Plc ), an entity is not required to disclose the amount of transaction price
allocated to the remaining performance obligations and an explanation of when the entity
expect to recognise that amount as revenue.

IFRS15(C8)

8.

Where the entity has chosen the simplified transition method, it shall apply IFRS 15
retrospectively only to contracts that are not completed at the date of initial application (1
January 2015 for VALUE IFRS Plc).

PwC

VALUE IFRS Plc

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IFRS 15 Revenue from contracts with customers

Presentation and description of contract assets and contract liabilities
IFRS15(BC320),(BC321)

9.

VALUE IFRS Plc has decided to reclassify contract assets and contract liabilities and present
them as a separate line item in the balance sheet. However, contract assets, contract liabilities
and receivables do not have to be referred to as such and do not need to be presented
separately in the balance sheet, as long as the entity provides sufficient information so users of
financial statements can distinguish them from other items.

Disclosures not illustrated: not applicable to VALUE IFRS Plc

10. The following requirements of IFRS 15 are not illustrated in this Appendix:
Initial application
Issue not illustrated

Relevant disclosures or reference

IFRS15(127)-(129),(94)

Costs incurred to obtain a contract

For assets recognised, provide disclosures as

per IFRS 15 paragraphs 127 and 128.
Where no asset is recognised because the
period of amortisation is one year or less,
disclose that fact.

IFRS15(119)(e)

Information about warranties and related

obligations

This information is provided in note 8(h) in

the 2015 edition of VALUE IFRS Plc.

IFRS15(C6)

Full retrospective method: practical

expedients used (see paragraph 7 above)

Disclose which expedients have been used

and, to the extent reasonably possible,
provide a qualitative assessment of the
estimated effect of applying each expedient.
VALUE IFRS Plc has only used the practical
expedient of IFRS 15.C5 (c), see illustrative
disclosure on page 5.

IFRS15(C8)

Simplified transition method

Disclose the amount by which each financial

statement line item is affected by the
adoption of the new rules in the current
period and explain the reasons for any
significant changes.

PwC

VALUE IFRS Plc

11
31 December 2015 2015