IFRS 15 vs. IFRS 2

Attribute	IFRS 15	IFRS 2
Scope	Revenue from contracts with customers	Share-based payment transactions
Objective	Recognize revenue to depict the transfer of promised goods or services to customers	Measure and recognize equity-settled and cash-settled share-based payment transactions
Measurement	Based on the consideration expected to be received in exchange for goods or services	Based on the fair value of the equity instruments granted or liability incurred
Recognition	Recognize revenue when control of goods or services is transferred to the customer	Recognize share-based payment expense over the vesting period
Disclosure	Requires extensive disclosures about revenue recognition policies and significant judgments	Requires disclosures about the nature and extent of share-based payment arrangements

Overview

IFRS 15 and IFRS 2 are both accounting standards issued by the International Financial Reporting Standards (IFRS) Foundation. While they both deal with revenue recognition, they have distinct differences in their scope and application.

IFRS 15

IFRS 15, Revenue from Contracts with Customers, provides a comprehensive framework for recognizing revenue from customer contracts. It outlines a five-step model that companies must follow to determine when and how much revenue to recognize. This standard applies to all industries and requires companies to assess the transfer of control of goods or services to customers.

• IFRS 15 focuses on the principles of recognizing revenue when control of goods or services is transferred to the customer.
• It emphasizes the importance of understanding the performance obligations in a contract and allocating the transaction price accordingly.
• IFRS 15 requires companies to disclose more detailed information about revenue recognition in their financial statements.
• It aims to provide a more consistent and transparent approach to revenue recognition across different industries.
• IFRS 15 has a broader scope compared to IFRS 2, as it applies to all revenue-generating activities of a company.

IFRS 2

IFRS 2, Share-based Payment, focuses on accounting for equity-settled and cash-settled share-based payment transactions. It requires companies to recognize the fair value of share-based payments as an expense in their financial statements. This standard applies to transactions where a company receives goods or services in exchange for equity instruments.

• IFRS 2 specifically deals with share-based compensation arrangements, such as stock options and restricted stock units.
• It requires companies to measure the fair value of share-based payments at the grant date and recognize this value as an expense over the vesting period.
• IFRS 2 aims to provide a consistent and transparent approach to accounting for share-based payments across different industries.
• It requires companies to disclose detailed information about share-based payment transactions in their financial statements.
• IFRS 2 has a narrower scope compared to IFRS 15, as it focuses specifically on share-based compensation arrangements.

Comparison

While IFRS 15 and IFRS 2 both aim to provide consistent and transparent accounting standards, they differ in their focus and application. IFRS 15 deals with revenue recognition from customer contracts, emphasizing the transfer of control of goods or services to customers. On the other hand, IFRS 2 focuses on accounting for share-based payment transactions, requiring companies to recognize the fair value of share-based payments as an expense.

IFRS 15 has a broader scope compared to IFRS 2, as it applies to all revenue-generating activities of a company. In contrast, IFRS 2 has a narrower focus on share-based compensation arrangements. Both standards require companies to disclose detailed information about the transactions in their financial statements, promoting transparency and comparability.

Overall, while IFRS 15 and IFRS 2 address different aspects of financial reporting, they both play a crucial role in ensuring accurate and reliable financial information for investors and stakeholders.