The reflection of the adoption of the International Financial Reporting Standard IFRS 15 (Revenue from contracts with customers) on the financial performance

Authors

  • Sagvan Misto Ibrahim College of Administration and Economics, University of Duhok, Kurdistan Region of Iraq
  • Shler Abdulrahman Rasheed College of Administration and Economics, University of Duhok, Kurdistan Region of Iraq

DOI:

https://doi.org/10.25007/ajnu.v11n3a1101

Abstract

In 2014, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) agreed to issue a special ifrs 15 revenue recognition standard called "income from contracts with customers" to address problems in both IAS11 "Construction Contracts" and IAS18 "Revenue." The research aims to show the specific requirements for revenue recognition during the five consecutive steps such as (contract determination, performance obligations, transaction price fixing, allocation of transaction price on separate performance obligations, finally recognition of revenue when committed to separate performance), and statement of the implications that will affect financial performance by adopting the IFRS 15 (income from contracts with customers). The importance of the research comes from demonstrating the implications for financial performance through the adoption of the IFRS 15 (income from contracts with clients) and the extent to which it contributes to recognizing the actual value of revenue. In order to achieve the objectives of the research, seven hypotheses have been adopted to test the reflection of the IFRS15 (income from contracts with clients) in financial performance. The research was based on the applied and comparative approach in the analysis of research variables. The research sample consisted of the income list and the list of the financial position of Char stin Trading Company for 2019. The search for several results has been explained, the most important of which helps the results of the financial ratios extracted in accordance with the international standard of financial report IFRS 15 (revenue from contracts with customers) used in making decisions by improving the comparability of the results of financial ratios with the ratios of financial statements to the world markets. The researcher made several recommendations, the most important of which is the interest in teaching accounting staff to know the criteria of international financial reports and in particular the standard of revenue from contracts with customers, to clarify how to determine the contract with customers and the concept of performance commitment and the determination of the price of the transaction and its allocation on performance obligations and recognition of revenue when adhering to performance.

 

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Published

2022-06-08

How to Cite

Misto Ibrahim, S. ., & Abdulrahman Rasheed, S. (2022). The reflection of the adoption of the International Financial Reporting Standard IFRS 15 (Revenue from contracts with customers) on the financial performance. Academic Journal of Nawroz University, 11(3), 43–64. https://doi.org/10.25007/ajnu.v11n3a1101

Issue

Vol. 11 No. 3 (2022)

Section

Articles

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Copyright (c) 2022 Sagvan Misto Ibrahim, Shler Abdulrahman Rasheed

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