Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers

Transcription

1 Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers Please note The audio for today s presentation will be transmitted through your computer speakers October 21, 2015

2 Speakers Moderator Jon Kligman Partner, Assurance and Advisory Presenters Maryse Vendette Partner, Assurance and Advisory Cindy Veinot Partner, Assurance and Advisory Please submit questions and comments by sending an to Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 2

3 Agenda 1 Background 2 Recent developments 3 Proposed amendments 4 Implementation considerations 5 Resources 6 Questions and answers Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 3

4 Important caveats This webcast does not provide official Deloitte interpretive accounting guidance. Check with your advisor before taking any action. Please submit questions and comments by sending an to Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 4

5 Background Scope What is In? Applies to contracts with customers Assess contracts with collaborators or partners Transfer or sale of non-financial assets Incremental costs of obtaining and costs incurred to fulfil a contract What is Out? Lease contracts Insurance contracts Financial instruments and other contractual rights or obligations within the scope of other Standards Non-monetary exchanges between entities in the same line of business to facilitate sales to customers or potential customers Certain transactions may fall partially within the scope of IFRS 15 and partially within the scope of other standards Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 5

6 Background (cont d) Effective date and transition options Effective date Annual reporting periods beginning on or after January 1, 2018, including interim reporting periods therein (FY 2018) NEW Early application is permitted under IFRS and U.S. GAAP Transition options 1) Retrospective Approach Practical expedients available 2) Modified Retrospective Approach Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 6

7 Background (cont d) The revenue model Core principle: Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services Recognition Para Recognition Para Measurement Para Measurement Para Recognition Para Identify the contract with a customer (Step 1) Identify the performance obligations in the contract (Step 2) Determine the transaction price (Step 3) Allocate the transaction price to performance obligations (Step 4) Recognize revenue when (or as) the entity satisfies a performance obligation (Step 5) This revenue recognition model is based on a control approach which differs from the risks and rewards approach applied under existing IFRS. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 7

8 Recent developments Joint Transition Resource Group for Revenue Recognition (TRG) Subsequent to release of the Standard, the IASB and the FASB implemented the TRG TRG solicits, analyzes and discusses stakeholder issues arising from implementation and will inform the IASB and the FASB of issues that may warrant further attention on the part of the Boards Composed of financial statement prepares, auditors and users that have significant knowledge and experience related to revenue recognition As at July 2015, 75 issues submitted (43 papers discussed) 36 issues with no further action at this time 15 issues submitted to Boards for further deliberations 8 issues are pending potential future discussions 3 issues may result in technical correction or minor improvement at a later date 13 issues pending minutes of July TRG meeting Next meeting scheduled for November 9, 2015 Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 8

9 Recent developments (cont d) Timeline May 2014 July 2014 January 2015 February March 2015 May 2015 June 2015 July 13, 2015 July 22, 2015 July 29, 2015 July 30, 2015 August 12, 2015 August 31, 2015 September 22, 2015 September 30, 2015 October 5, 2015 Standard Issued TRG TRG TRG FASB/IASB FASB/IASB TRG FASB/IASB FASB proposed ASU issued Identifying performance obligations Licenses and royalties Comment period ended: June 30, 2015 TRG IFRS deferral approved FASB FASB deferral approved IFRS exposure draft issued Identifying performance obligations Licences and royalties Principal vs agent Practical expedients Contract modifications and completed contracts Comment period ends: October 28, 2015 FASB IASB FASB proposed ASU issued Gross vs. net Comment period ended: October 15, 2015 FASB proposed ASU issued Narrow-Scope Improvements Practical Expedients Comment period ends: November 16, 2015 FASB Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 9

10 Recent developments (cont d) Board discussions Issue IFRS Proposed amendment* FASB Proposed amendments* Identifying performance obligations (i.e., identifying promised No amendment May 2015 goods or services) Immaterial promised goods or services No amendment May 2015 Shipping and handling activities No amendment May 2015 Identifying when promises represent performance obligations July 2015 May 2015 Determining the nature of an entity s promise in granting a licence July 2015 May 2015 Sales-based and usage-based royalties exception July 2015 May 2015 Principal vs agent [Gross vs. Net] July 2015 August 2015 Practical expedients Contract modifications and July 2015 September 2015 completed contracts Sales tax presentation Gross versus net No amendment September 2015 Non-cash consideration No amendment September 2015 Collectability No amendment September 2015 *Note: Although some amendments cover the same topics, the amendments proposed by the Boards differ in some respects. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 10

11 Proposed amendments Identifying performance obligations Step 1 Step 2 Step 3 Step 4 Step 5 Issue IASB Decision FASB Decision Determining whether promised goods and services are distinct in the context of the contract Shipping and handling services as a promised service or activity to fulfill other promises Identifying immaterial promised goods or services No amendments to the guidance were proposed; however, additional illustrative examples will be included No updates were proposed No updates were proposed. The following decisions were made: Define the term separately identifiable Reframe the separation criteria to focus on a bundle of goods or services, and Add illustrative examples Clarified that shipping and handling that occurs before control transfers to the customer are fulfillment activities and allows entities to elect as a practical expedient to treat shipping and handling as fulfillment activities if they occur after control transfers Entities are not required to identify promised goods or services that are immaterial in the context of the contract Refer to the FASB s Proposed ASU issued on May 12, 2015 and the IASB s Exposure Draft issued on July 30, 2015 for further information. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 11

12 Identifying performance obligations Example Goods and services [FASB ASU 606, Ex. 11D] Company ABC enters into a contract with a customer to provide equipment as well as installation services. The equipment is functional without customization or modification. Installation can be performed by other service providers. The contract requires that Company ABC is used for installation. Identify the performance obligation(s). Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 12

13 Identifying performance obligations (cont d) Example Goods and services Evaluate the relationship between the goods and services in fulfilling the contract (level of integration, interrelation and interdependence) Functional Goods and services are by their nature dependent upon the other to function Transformative Goods and services are transformed into a promise that is greater than the sum of the underlying items The customer can benefit from: The equipment (on its own through use or resale), and The installation services (in conjunction with the equipment) The equipment is not modified or customized by: Installation, OR Contractual requirement to use Company ABC s installation services Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 13

14 Identifying performance obligations (cont d) Example Shipping and handling services Entity A enters into a contract with Customer B for goods that are shipped on a Cost, Insurance and Freight (CIF) basis. Terms are such that title passes once the goods cross to the ship s rail at which time Customer B is obliged also to pay for the goods. Entity A is responsible for freight as a principal. Identify the performance obligation(s). 1. Sale of goods 2. Freight services Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 14

15 Identifying performance obligations (cont d) Timing of shipping and handling services When do shipping and handling activities occur? BEFORE transfer of control Fulfilment activity AFTER transfer of control Separate performance obligation U.S. GAAP: Accounting Policy Fulfilment activity Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 15

16 Proposed amendments Licences of intellectual property Step 1 Step 2 Step 3 Step 4 Step 5 Issue IASB Decision FASB Decision Determining the nature of an entity s promise in granting licence - right to access over time or right to use at a point in time When to recognize revenue for sales-based and usagebased royalties An entity should focus on whether an entity s activities significantly affect the IP to determine the nature of a licence Requires an entity to characterize the nature of a licence as either functional or symbolic. This determination is based on whether the underlying IP has significant standalone functionality The following decisions were made: An entity should not split a royalty when determining whether to apply the constraint exception, and An entity should apply the royalty constraint exception if the licence is the predominant feature to which the royalty relates Refer to the FASB s Proposed ASU issued on May 12, 2015 and the IASB s Exposure Draft issued on July 30, 2015 for further information. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 16

17 Licences of intellectual property Example Sales-based royalties [IFRS 15,Ex. 60] An entity, a movie distribution company, enters into a contract to licence Movie XYZ to a customer, an operator of cinemas, for six weeks. The total consideration the entity will receive is a portion of the operator s ticket sales for Movie XYZ. In addition, the entity has agreed to: a) Provide memorabilia for display at the customer s cinemas prior to the six week screening period, and b) Sponsor radio advertisements for Movie XYZ on local radio stations throughout the six week screening period. Does the royalty constraint apply? How is revenue recognized? Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 17

18 Licences of intellectual property (cont d) Example Sales-based royalties Yes, the sales-based royalty constraint applies since the licence to show Movie XYZ is the predominant item or performance obligation. Revenue is recognized only when (or as) the later of the following events occurs: a) The subsequent sale or usage occurs [as tickets sold and movie shown], and b) The performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 18

19 Licences of intellectual property (cont d) Example Right to use vs. right to access [IFRS 15,Ex. 58] A creator of comic strips licences the use of the images and names of its comic strip characters for a four-year term. There are main characters in the comic strips, whose images evolve over time and new characters are periodically introduced. The customer can use the entity s characters in various ways but the contract requires the customer to use the latest images of the characters. In exchange for granting the licence, the creator receives a fixed payment of $1 million in each year of the four-year term. What is the nature of the licence? Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 19

20 Licences of intellectual property (cont d) Example Right to use vs. right to access What is the nature of the entity s promise in granting the licence? The creator s activities [evolving images] changes the form of the intellectual property to which the customer has rights. Right to access IP throughout the licence term Recognize over time Right to use IP as it exists when licence granted Recognize at a point in time The rights granted by the licence directly expose the customer to any positive or negative effects of subsequent activities [contract requires the customer to use the latest characters]. Even though the customer may benefit from those activities through the rights granted by the licence, they do not transfer a good or service to the customer as those activities occur. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 20

21 Proposed amendments Non-cash consideration and sales tax presentation Step 1 Step 2 Step 3 Step 4 Step 5 Issue IASB decision FASB decision Determining the measurement date for non-cash consideration and application of the variable consideration constraint Simplifying the application of sales tax presentation No updates were proposed No updates were proposed. Standard clarifies that: An entity should measure at fair value non-cash consideration at contract inception, and The constraint should only apply to variability resulting from reasons other than the form of consideration Permits entities, as an accounting policy election, to exclude amounts collected from customers for all sales taxes from the transaction price Refer to the FASB s Proposed ASU issued on September 30, No updates are currently being proposed by the IASB for these topics, however stakeholder input on the Clarifications to IFRS 15 ED may eventually influence the future agenda. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 21

22 Non-cash consideration Example [FASB ASU 606, Ex. 31] An entity enters into a contract with a customer to provide a weekly service for one year. The contract is signed on January 1, and work begins immediately. In exchange for the service, the customer promises 100 shares of its common stock per week of service (5,200 shares total). The contract requires that the shares are paid upon the successful completion of each week of service. How should the non-cash consideration be measured? Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 22

23 Non-cash consideration (cont d) Example IFRS Measure consideration by reference to the FV of 100 shares received upon completion of each weekly service. Revenue recognized = 100 shares * week 1 market price Revenue recognized = 100 shares * week 2 market price Revenue recognized = 100 shares * week 3 market price U.S. GAAP Measure consideration as at the contract inception date. Revenue recognized = 5200 shares * market price Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 23

24 Proposed amendments Collectability Step 1 Step 2 Step 3 Step 4 Step 5 Issue IASB decision FASB decision Clarification of the collectability criterion and accounting for contracts that fail the collectability criteria. No updates were proposed. Standard clarifies that: Collectability would be assessed on the basis of the amount to which the entity will be entitled, and A contract is terminated if the entity has the ability to stop transferring goods or services to the customer. Revenue is recognized when the entity has transferred control of the goods or services, the entity has stopped transferring additional goods or services and has no obligation to transfer additional goods or services, and the consideration received from the customer is nonrefundable. Refer to the FASB s Proposed ASU issued on September 30, No updates are currently being proposed by the IASB for these topics, however stakeholder input on the Clarifications to IFRS 15 ED may eventually influence the future agenda. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 24

25 Collectability Example [FASB Memo March 12, 2015] An entity enters into a contract with a customer for the supply of a good [modem] and the provision of a subsequent service [internet] for 3 years. The contract price is $460, payable as follows: $100 at contract inception when the modem is transferred to the customer $10 payable at the end of each month for the next 3 years as the service is provided In the first month of the second year, the customer stops paying consideration when it is due. How should revenue be recognized? What if the entity stops providing the service to the customer? Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 25

26 Proposed amendments Principal versus agent considerations Issue IASB Decision FASB Decision Principal agent considerations Standard clarifies that: An entity should assess whether it obtains control of the distinct good or service before it is transferred to the customer to determine whether it is acting as a principal or agent The indicators in the standard are intended to assist an entity with determining whether it obtains control of a good or service, and are not intended to override the control principle, and Clarified that each indicator can have more or less significance than others In a contract with multiple goods or services, an entity could be a principal for some and an agent for others Refer to the FASB s Proposed ASU issued on August 31, 2015 and the IASB s Exposure Draft issued on July 30, 2015 for further information. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 26

27 Principal versus agent considerations Example [IFRS 15,Ex. 46A] An entity enters into a contract with a customer to provide office maintenance services. The customer is invoiced a fixed price on a monthly basis with 10-day payment terms. The entity then engages a third-party service provider to provide the office maintenance services. Payment terms are aligned with the customer s terms, however, the entity must pay regardless. Is the entity a principal or agent? Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 27

28 Principal versus agent considerations (cont d) Example Assess when control is obtained: The entity is able to direct the third-party service provider to provide specified services on its behalf Thus obtains control of the services before they are provided to the customer Consider additional indicators/criteria, if necessary: The entity: Responsible for the acceptability of the services Has discretion in setting the price for the services to the customer Has credit risk for the amount receivable from the customer Does not have inventory is risk Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 28

29 Proposed amendments Practical expedients upon transition With respect to contract modifications occurring before adoption of the standard, an entity is permitted to use hindsight as of the contract modification adjustment date ( CMAD ) and perform a single analysis to determine the transaction price and allocate the transaction price to performance obligations Topic IASB Decision FASB Decision Practical expedient upon transition to address contract modifications The CMAD is defined as the beginning of the earliest period presented under both transition methods The CMAD is defined as the beginning of the earliest year presented upon initial adoption of the standard under the full retrospective approach and the beginning of the current period under the modified approach Refer to the FASB s Proposed ASU issued on September 30, 2015 and the IASB s Exposure Draft issued on July 30, 2015 for further information. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 29

30 Practical expedients upon transition Contract modifications Contract begins in 2014, ends in Date of initial application Modification #1 Modification #2 Full retrospective approach Do NOT separately evaluate the effect of each contract modification prior to January 1, 2017 Modified retrospective approach Do NOT separately evaluate the effect of each contract modification prior to January 1, 2017 Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 30

31 Proposed amendments Practical expedients upon transition Topic IASB Decision FASB Decision Practical expedients upon transition to address completed contracts. With respect to completed contracts, entities are also permitted to exclude the evaluation of any contract completed at the beginning of the earliest period presented when applying the full retrospective transition approach. Standard clarifies: The definition of a completed contract That entities are permitted apply modified retrospective transition approach either to all contracts or only to contracts not completed as at date of initial application. Refer to the FASB s Proposed ASU issued on September 30, 2015 and the IASB s Exposure Draft issued on July 30, 2015 for further information. Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 31

32 Practical expedients upon transition Completed contracts Definition IFRS 15 A completed contract is a contract for which the entity has transferred all of the goods or services identified in accordance with IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations. FASB s Proposed ASU A completed contract is a contract for which all (or substantially all) of the revenue was recognized in accordance with revenue guidance that is in effect before the date of initial application. Example A licence with future royalty stream. The entity has delivered the licence. Revenue is being recognized as the royalties are reported. IFRS: Contract is completed Licence has been delivered U.S. GAAP: Contract is not complete Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 32

33 Transition method considerations Full retrospective method Advantages - All contracts are restated leading to a more fulsome depiction of financial performance, greater comparability and consistency. - Better trend information for stakeholders, facilitating more meaningful conclusions. Disadvantages - A larger population of contracts to be obtained, analyzed and assessed. - Potential issue with obtaining historical information supporting analysis and disclosures, increasing reliance on legacy systems and other departments Modified retrospective method Advantages - Smaller population of contracts and no disclosures for comparative periods, reducing the volume of information required for transition. Disadvantages - Presentation may be fragmented providing limited comparability among periods and reducing trend information - Although restatement of comparative period is not required, additional disclosures are still required. - In year of transition, entities will need to retain two sets of records, and potentially require two sets of systems, controls, processes, etc., to have parallel accounting Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 33

34 Implementing IFRS 15 Accounting Changes Timing, Presentation and Disclosure Processes and Controls Stakeholders Information Technology People Tax Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 34

35 Processes and controls considerations Examples of implications 1 Combining contracts; Modifying contracts 2 Material rights 3 Tracking information for disclosure Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 35

36 Process and control considerations Contract combinations, contract modifications Operational change/challenge Contracts negotiated with the same counterparty (related entity) and meeting certain criteria need to be combined and evaluated as one contract Modifications to contracts are accounted for prospectively (separately or combined with outstanding obligations) or retrospectively Process and control considerations Identification of contracts to be considered for combination Time-line Criteria for combination Types of modifications permitted Identifying and tracking modifications Analyzing modifications Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 36

37 Process and control considerations (cont d) Material rights Operational change/challenge Material rights May include: Loyalty programs Option to purchase goods or services Option to extend contract at a lower price Non-refundable upfront fees Valuation of material right Accounting for material right Process and control considerations Process to identify material rights Flagging free/discounted goods or services Valuation process Estimating the percentage of options that will be exercised Tracking exercise or expiration of option Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 37

38 Process and control considerations (cont d) Disclosures Operational change/challenge Significant additional quantitative data to disclose Disaggregation of revenue Transaction price allocated to remaining performance obligations Revenue recognized that was included in contract liability Closing balance of costs to obtain or fulfill a contract by category Amortization of contract assets Process and control considerations Processes for aggregating data Contract database Reconciliation processes Linking amortization of contract assets to transfer or goods/services under contracts Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 38

39 Information Technology considerations Technology solutions to address changes related to the new standard ERP Vendor Solutions (e.g., Oracle, SAP) ERP vendors are well positioned to support solutions based on their deep expertise in financial processing and reporting Oracle Advocates the Sub- Ledger Accounting (SLA) and Financial Accounting Hub (FAH) modules to address the business rules need within the Standard SAP Leverages RM-CA to support revenue sub-ledger accounting and business rules NetSuite Encourages their cloud-based ERP solution with integrated revenue management module Specialty Solution/ Business Rules Engine Various accounting specific business rules and revenue management solutions have started to work on re-designing their solution to be compliant with the standard and work in conjunction with existing ERP implementations. Vendors include: Leeyo (RevPro), RevStream (RevStream), Microgen (Aptitude), Softtrax (Softtrax Revenue Manager) Custom Existing data warehouse to support customized solution Possibilities might exists to address specific parts of an endto-end solution with a custom built system (e.g., contract data storage) Typically longer life cycle and higher cost of ownership Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 39

40 Information technology considerations (cont d) Areas to explore in considering solutions for your specific requirements Areas to explore in considering solutions for your specific requirements Incremental data/system requirements What data or system changes will be critical to new accounting complexities? Industry alignment Does the solution cater to or specialize in the client s industry? Automation opportunity Can the current process be readily scaled or automated to reduce overall process risk? Integration of products What other systems will need to integrate with the solution? (e.g., CRM, CMS, Sales, Billing, ERP) Hosting model Are you best served by a web-based (cloud) solution or one that is hosted on-site? Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 40

41 Information technology considerations (cont d) Needs and capabilities Leverage learnings from others Accelerator tools External expertise Across multiple phases of the lifecycle Impact assessments, scenario and business requirements development, IT solution design and program management support Deep experience within industries Business-to- Consumer and Business-to- Business B2B, Hosted Managed Services ( HMS ) Accounting positions Issues/gaps template Use case scenario inventory Detailed calculation templates for all scenarios Solution architecture diagrams Data dictionary Pre-populated Business Requirements Documents ( BRDs ) Across various industries within Europe and the Americas, with a heavy focus on technology, media, and telecommunications Cross-functional teams to provide a breadth of services Technical accounting, IT consulting and tax Learnings from roundtables with technology, media and telecommunications industry representatives Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 41

42 Implementation considerations Near-term actions and important decisions Near-term actions Scope the impact of the standard what revenue streams are in scope Develop a short-term plan to assess the key impacts and prepare an implementation plan by: Reviewing sample of contracts Analyzing effect of the changes on financial statements Identifying disclosures requiring new data elements to be collected Estimate the level of effort required to implement the standard Important decisions Accounting policy choices and significant judgments Transition method Contract vs. portfolio approach Systems approach Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 42

43 Resources Deloitte resources IASPlus IFRS in Focus Accounting Roundup Heads Up Center for Corporate Governance The new revenue recognition standard webcast - June 26, 2014 Other resources IASB website TRG meetings and summaries AICPA task forces CPA Canada Reporting Alert: IFRS 15 Revenue from Contracts with Customers Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 43

44 Resources (cont d) Contacts Toronto Sean Morrison Partner Cindy Veinot Partner Mark Wayland Partner Montreal Nick Capanna Partner Vancouver Joe Read Senior Manager Calgary/Edmonton/Winnipeg Steve Aubin Partner National Maryse Vendette Partner Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 44

45 Questions and answers Deloitte LLP and affiliated entities. Bringing clarity to an IFRS world IFRS 15 Revenue from contracts with customers 45

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