The new International Financial Reporting Standard 15 "Revenue from Contracts with Customers" (IFRS 15) is due to enter into force on 1st January 2017. What is important is that comparable data presented in financial statements for the trade year due after 1st January 2017 must comply with the new standard, which actually means that provisions of IFRS 15 should be applied starting 1st January 2016.
The introduction of the new standard comes as a great convenience to businesses operating internationally. In fact, the requirements of IFRS 15 constitute a complete unification of accounting principles according to IFRSs and US GAAP.
There are currently several standards regulating the subject of correct revenue recognition depending on the type of contract with your counterparty. IFRS 15 provides a single model for such contracts, with the exception of revenue defined in separate standards (insurance, leasing, financial instruments as well as interest and dividend revenue).
The currently binding International Financial Reporting Standard 18 "Revenue" (IFRS 18) includes separate provisions for sales revenue recognition. The new regulation breaks away from considering revenue when significant risk has been transferred, while moving towards an approach that recognises revenue when obligations on the seller's part have been fulfilled or control over the good/service has been transferred to the client.
The new regulation also includes guidelines never defined in the provisions before: among others, standards for licenses, warranties, right of return, client acceptance, repurchase and bill-and-hold arrangements. For many companies this means sales revenue will have to be divided into one part that covers strictly the sale of a good or service and another part to cover the warranty. According to IFRS 15, the revenue from the other part shall be spread over time throughout the guarantee period. On the other hand, revenue recognition for companies that enable clients to return goods in a specific time (such as businesses offering online sales) will only apply after this period has expired.