Companies in the UAE to be subject to new IFRS 15 disclosure requirements
Dubai, February 2015: KPMG, a leading global audit and advisory services firm, conducted a series of seminars on the new International Financing Reporting Standards (IFRS) 15 which was issued last, and introduces new guidelines for revenue from contracts with customers.
The new revenue standard is expected to affect the way companies account for revenue as it replaces existing IFRS and US Generally Accepted Accounting Principles (GAAP) guidance. For some, the new standard will have a significant impact on how and when they recognize revenue, but for others transition will be easier.
If your company has operations in real estate, telecommunications, retail, asset management, building and construction, contract manufacturing, software, aerospace and defense, then you are more likely to be significantly affected by one or more of the new requirements. However, all companies will be subject to extensive new disclosure requirements.
The IFRS will create several changes - Revenue recognition may be accelerated or deferred, revenue recognition may change from at a point in time to over time, or vice versa and contract terms and business practices may be affected.
Currently, many property developers in the region are considering early adoption of this IFRS as this could result in them recognizing their revenue on a percentage completion basis, which is a departure from the current requirements which force them to recognize revenue only on handover of their property. Telecommunications companies in the region have also been closely monitoring the IFRS as it will have significant impact on how they account for their current bundle packages.
Yusuf Hassan, head of Accounting Advisory Services in KPMG UAE said: The KPMG Seminar on IFRS 15 will provide companies with a practical approach on dealing with the requirements of IFRS 15. As with all our seminars, we firmly believe in the importance of supporting the industry with platforms such as this. The seminar will encourage open discussion to allow participants to gain from the collective experience of KPMG and their industry colleagues.”
The seminar was presented by Prabhakar Kalavacherla, a partner in KPMG US, who was involved in the drafting of the IFRS and provided deep insights onto the reasons for the drafting and context of the standard broadly.
Other topics covered during the seminar include an overview of the standard, the five-step model, practical challenges, disclosure requirements, transition to the new standard, and case studies.
A general seminar was held on 17 February 2015 and a real estate specific seminar was held on 19 February both at the JW Marquis Marriott Dubai.
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The views and opinions expressed herein are the personal opinions of the interviewees and authors based on their personal experience working as Auditors in the industry and do not necessarily represent the views or opinions of KPMG International or any KPMG member firm.