Dutch Council for Annual Reporting expression on IFRS-15
As a result of issuing IFRS 15 by the IASB, which replaces IAS 18 and IAS 11, the Dutch Council for Annual Reporting (RJ) is giving companies the opportunity to report their revenues and related costs in accordance with IFRS 15. Because there are less differences between IFRS 15 and ASC 606, this is also an opportunity for entities with financial statements that are part of consolidated financial statements under US GAAP. The translated expression of the Dutch Council for Annual Reporting is outlined below.
RJ expression 2017-9: Possibility of accounting for revenue and related costs in accordance with IFRS 15 under the guidelines for annual reporting
IFRS 15 – Revenue from Contracts with Customers, issued by the IASB and endorsed by the European Union, replaces the current standards of IAS 18 - Revenue and IAS 11 – Construction Contracts and related interpretations. IFRS 15 applies to financial years that start on or after Jan. 1, 2018. The Dutch Council for Annual Reporting (RJ) intends to facilitate the application of IFRS 15 in the Netherlands to companies that comply with the Dutch guidelines for annual reporting (the guidelines). To this end, the RJ is currently assessing whether the provisions of IFRS 15 can be included in the guidelines.
In this context, RJ intends to create a new principles-based guideline about accounting for revenues and related costs, based on the principles of IFRS 15. For the sake of clarity it should be noted that the RJ has not yet taken a decision on the precise content of a (new) directive on the accounting of revenue and related costs. Nonetheless, RJ wishes to communicate that the guidelines will, in any case, facilitate that accounting for revenues and related costs in accordance with IFRS 15 can take place.
RJ considers it important that companies should, where appropriate, be given the opportunity to account for their revenues and related costs in accordance with IFRS15. This is because legal entities that apply the guidelines for annual reporting in respect of accounting for revenue and related costs can be connected with a parent company that reports under IFRS. This also offers the opportunity for companies to follow standard industry practices related to accounting for revenues and related costs. This is the case, for example, with companies in industries where IFRS is the accepted standard.
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