Workshop Overview

Revenue recognition under FRS 115 – Revenue from Contracts with Customers presents significant challenges for businesses, particularly when dealing with complex contracts, variable pricing, and multiple performance obligations. This workshop is designed to demystify the standard by breaking down its 5-step model into practical, actionable insights. Through real-world case studies and interactive discussions, participants will learn how to identify performance obligations, determine transaction prices (including variable and non-cash considerations), and apply the correct timing and measurement methods for revenue recognition. The session will also address common pitfalls, such as misclassifying bundled services or mishandling contract modifications, ensuring compliance while minimizing financial reporting risks.

Beyond the fundamentals, this workshop delves into advanced application scenarios, including the impact of third-party costs, principal-agent considerations, and the nuances of long-term contracts. Attendees will explore how FRS 115 interacts with other standards, such as FRS 116 (Leases) and FRS 104 (Insurance Contracts), for a holistic understanding of revenue reporting. By the end of the session, participants will be equipped to navigate ambiguities in contracts, justify accounting judgments, and implement robust revenue recognition policies tailored to their industry—whether in construction, SaaS, manufacturing, or retail.

Event Outline:

1. Understanding the Scope of FRS 115 

   - Revenue streams excluded from FRS 115 (e.g., lease income, dividends) 

   - Revenue streams partially covered (e.g., warranties, licensing)  

2. Identifying Performance Obligations 

   - Criteria for distinct performance obligations 

   - Assessing whether goods/services are separable 

   - Case study: Bundled contracts vs. standalone deliverables 

3. Determining the Transaction Price

   - Handling variable consideration (e.g., discounts, rebates, penalties) 

   - Non-cash consideration (fair value measurement) 

   - Significant financing components (time value of money) 

4. Revenue Recognition: Timing & Measurement

   - Point-in-time vs. over-time recognition (key indicators) 

   - Output vs. input methods (choosing the right approach) 

   - Case study: Long-term construction contracts vs. software licensing 

5. Contract Modifications & Terminations 

   - Accounting for changes in scope/pricing 

   - When is a contract considered terminated?

   - Adjusting revenue recognition post-modification 

6. Special Considerations

   - Impact of third-party costs on revenue recognition 

   - Principal vs. agent considerations (gross vs. net reporting) 

   - Practical challenges in implementation (common pitfalls & solutions) 

Key Takeaways 

By the end of this workshop, participants will: 

✔ Master the 5-step model of FRS 115 for accurate revenue recognition.

✔ Confidently identify performance obligations and allocate transaction prices.

✔ Apply correct timing (point-in-time or over-time) and measurement methods (input/output).

✔ Handle complex scenarios, including contract modifications, variable pricing, and non-cash considerations.

✔ Avoid common pitfalls in financial reporting related to third-party costs and bundled contracts. 

Who Should Attend?

This workshop is essential for professionals involved in financial reporting, auditing, or contract management, including: 

- Accountants & Auditors – Ensuring compliance with FRS 115 in financial statements. 

- Financial Controllers & CFOs – Overseeing accurate revenue recognition policies. 

- Finance Managers & Analysts – Assessing revenue impacts in contracts. 

- Business Owners & Sales Teams – Understanding revenue implications in customer agreements. 

- Internal & External Auditors – Reviewing revenue recognition practices for accuracy.