engleski

Quality of notes on revenues according to IFRS 15 - case of service companies in Croatia

The amount and timing of revenue recognition largely affects company's presented financial performance in a given period. Therefore, any change in the regulation related to revenues will be visible in the financial statements, as is the case with the changes in accounting standards. For companies applying international accounting standards, the relevant accounting standard is IFRS 15 Revenue from Contracts with Customers, becoming affective for annual periods on or after 1st January 2018. The new standard introduced a single five-step model for revenue recognition from contracts with customers. According to the research conducted during the phase of preparing for the full implementation of the new standard, it was expected that the changes will be especially evident in certain industries with various specific factors, such as rights of return, variable considerations, warranties, discounts, contract modification etc. In order to investigate how these changes actually affected financial statements, we have conducted an analysis on a sample of large service companies in Croatia, from three sections of activities: 1) information and communication, 2) professional, scientific and technical service activities, and 3) arts, entertainment and recreation. Special emphasis was on notes to financial statements with the aim of exploring whether companies act in accordance with the disclosure requirements of IFRS 15.

revenue recognition ; international accounting standards ; IFRS 15 ; financial statements ; notes to financial statements

This paper is the result of a project entitled “Influence of changes in accounting principles for revenue measurement on company’s business performance”, which was financed by the University of Zagreb as the short-term research support for the year 2019.