Principles of recognizing revenue from contracts with customers as stipulated in IFRS 15 - Revenue from Contracts with Customers
Importance The new International Financial Reporting Standard, Revenue from Contracts with Customers, called the accounting community for addressing a fundamental issue of setting up principles entities should follow to recognize meaningful information on the nature, value, timing and uncertainty of revenue and cash flows from contracts with customers. Objectives The research explores the recognition of revenue from contracts with customers and determines principles for entering it into accounting records. Methods The research draws upon the concept of constructive obligation. Results We devised our own model for accounting revenue from contracts with customers, which was based on the constructive obligation accounting principles. Conclusions If the principles of recognizing revenue from contracts with customers are implemented, it will considerably change approaches to accounting corporate income and require changes in conventional accounting views on the issue.