Question

The 2019 financial reporting season saw many Australian companies issue their first annual reports applying the new revenue standard, IFRS/AASB 15 Revenue from contracts with customers. The objective of the new standard was to provide greater clarity and better disclosure of a company’s revenue, as well as more consistency between companies.

Required

Write the impact of applying AASB 15 with reference to the Qantas Group’s 2019 Financial Report.

1. Outline the key changes under the AASB 15, with reference to the Qantas Group Annual Report and AASB 15

Answer 1

Accounting Standard AASB - 15:-

The Australian Accounting Standards Board made Accounting Standars AASB 15 Revenue from Contracts with Customers under section 334 of the Corporation Act 2001 on 12 Dec. 2014.

The comiled version of AASB 15 applies to annual periods begning on or after 01.01.2019 but before 01.01.2021. It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 04.09.2018.

AASB15 Revenue from Contracts with Costumers as amended incoporates IFRS 15 Revenue from Contracts with Customers as issued and amended by the International Accounting Standards Board (IASB). Australian specific paragraph are identified with the prefix "Aus". Paragraphs that apply only to not-for-profit entities by identifying their limited applicability.

Tier 1

For-profit entities complying with AASB 15 also comply with IFRS 15.

Not-for-profit entities compliance with IFRS 15 will depend on whether any "Aus" paragraphs that specifically apply to not-for-profit entities provide additional guidance or applicable requirements that are inconsistent with IFRS 15.

Tier 2

Entities perparing general purpose financial statements under Australian Standards reduced Disclosure Requirements will not be in compliance with IFRS standards.

The ojective of this Standard is to estabilsh the principales that an entity shall apply to report useful information to users of financial statements sbout the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a cutomer.

To meet the objective of above said, the core principle of this Standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

This standard specifies the accounting for an individual contract with a customer. However, as a practical expedient, an entity may apply this Standard to a portfolio of contracts with similer characteristics if the entity reasonably expects that the effects on the financial statements of applying this Standard to the portfolio would not differ materially from applying this Standard to the individul contracts(or performance obligations) within that portfolio. When accounting for a portfolio, an entity shall use estimates an assumptions that reflect the size and composition of the portfolio.

Qantas Group’s is a Australian airline company which is provided domestic and international air travelling fecility in Australia. Its the oldest airline in the world, after KLM and Avianca. Due to its a oldest and largest airline in the world there are it is most important to comply with international accounting standards for faverable financial requirments world wide.

AASB 15 given information to all relative parties about the Qantas Group financial position and relation with its individual contracts. So its very usefull tools for it.