Exposure Draft on Section 23 Revenue of the IFRS for SMEs

Section 23 of the IFRS for SMEs Accounting Standard set out requirement for SMEs to recognise revenue. It is based on IAS11 Construction Contracts and IAS 18 Revenue.

The IASB has applied the alignment approach to IFRS 15 Revenue from Contracts with Customers and is proposing to revise Section 23 by introducing a single framework for recognising revenue for goods and services.

The IASB is proposing to

introduce a framework for recognizing revenue which require revenue to be recognized when the customer obtains control of the goods/service, based on the 5 step model in IFRS 15.
simplify requirements of IFRS 15 to make the five-step model easier for SME
provide transition relief to allow SME to apply their current revenue recognition policy to contracts already in progress.

Framework for recognizing revenue

1. Identify the contract with a customer

2. Identify the promises in the contract

3. Determine the transaction price

4. Allocate the transaction price to the promises in the contract

5. Recognise revenue when (or as) the entity satisfy a promise

What would this proposal mean for SME?

A comprehensive framework for determining when and how much revenue to recognise for goods and services.

For many contracts, the revised Section23 is expected to have little, if any, effect on the amount and timing of revenue recognition.

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AccountKtp KtpSeptember 26, 2022IFRS, IFRS for SMEs, Section 23 Revenue

Exposure Draft on Section 23 Revenue of the IFRS for SMEs

Exposure Draft on Section 23 Revenue of the IFRS for SMEs

The IASB is proposing to

Framework for recognizing revenue

What would this proposal mean for SME?

Visit Us

KTP (Audit, Tax, Advisory)

THK (Secretarial, Bookkeeping, Payroll, Advisory)

KTP Lifestyle

KTP Career

We are affiliated with THK which specializes in secretarial, accounting & payroll and advisory for more than 25 years of history.