Abstract

As users' needs become larger, entities need to adapt their provided information. Thus, financial reporting suffers permanent changes. One of the recent changes that occurred at entities that report in line with the International Financial Reporting Standards, applicable from 2018, highlights the IFRS 15 revenue recognition approach, which amends IAS 18 and is based rather on a related approach transfer of control than on the commonly used risk transfer and benefit approach. The areas that best reflect these changes are telecommunications, software development, real estate investment and construction. In this paper it is emphasized the impact of the new IFRS 15 standard on income recognition, highlighting various illustrative examples.

Highlights

  • Changes, such as the evolution of global markets, the rapid development and dissemination of technology, customer requirements related to product differentiation, affect the organizational environment

  • The need to have financial statements that contain comparable information at international level has increased in Romania, especially in the public interest entities, and in order to assess the performance in the whole business environment

  • One of the reporting frameworks that provide an important benchmark for this comparability is the International Financial Reporting Standards (IFRS)

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Summary

Introduction

Changes, such as the evolution of global markets, the rapid development and dissemination of technology, customer requirements related to product differentiation, affect the organizational environment. The need to have financial statements that contain comparable information at international level has increased in Romania, especially in the public interest entities, and in order to assess the performance in the whole business environment. One of the reporting frameworks that provide an important benchmark for this comparability is the International Financial Reporting Standards (IFRS). In Romania, convergence towards compliance with IFRS has taken place over the last few years, the Romanian regulations being very close to international standards, but there are a number of differences that lead to different profit / loss results. IFRSs have been amended, and are reflected in the amendments to national law that are mandatory for those entities that apply IFRSs

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