EFRAG Study on IFRS 15 yields insights into utility

Posted on December 2, 2023 by Editor

The European Financial Reporting Advisory Group (EFRAG) has recently published a study shedding light on the effects of the adoption of IFRS 15.

The aim was to assess the impact of IFRS 15 adoption on both preparers and users of financial statements. It delves into the related costs and benefits, addressing broad questions focused on regulatory changes, the relevance and usefulness of financial information reported, and the transformation of Management Control Systems (MCS) affecting decision-making processes.

The study showed that users perceived IFRS 15 as effectively achieving its goal of increasing the usefulness of financial statements for decision making – which was achieved through the enhanced disclosure requirements resulting in more transparent and comprehensive understanding of financial performance.

From the preparer perspective, the Standard implementation has had a somewhat – and significant in some industries – effect on MCS, largely driven by the new disclosure requirements.

The study’s outcomes were integrated into EFRAG’s comment letter in response to the IASB Request for Information on the post-implementation review of IFRS 15.

For those interested in exploring the complete study, it is available here.

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