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HCL Technologies

IFRS 15 Compliance - Why Waiting is Not an Option

IFRS 15 Compliance - Why Waiting is Not an Option

Does your company sell services or recognize revenue from long-term contracts? If so, then you have probably already started your IFRS 15 revenue from contracts with customers’ implementation journey. And if not, you may have assumed that IFRS 15 implementation would be simple to implement and the 1 January 2018 deadline for European companies is easy to meet – or even irrelevant to your industry.

The reality, however, is that IFRS 15 will affect most companies – no matter what your industry. The biggest challenges will be faced by companies engaged in major projects and those that sell bundled products and services such as engineering, utilities, manufacturing, real estate, construction, telecommunications, IT/software.

Understanding the accounting and compliance changes associated with the new guidelines is only one part of an IFRS 15 implementation. We recommend that companies view the implementation of IFRS 15 guidelines as both an accounting and an IT project.

Users of SAP financials will need to implement SAP’s RAR solution, which will de-risk compliance by automating revenue recognition and accounting policy rules whilst providing an audit trail. Given the 1 January 2018 compliance deadline, we recognize the need for an accelerated approach to implementing SAP RAR and other required changes to our client’s SAP systems.