First time adoption of IFRS 15 ― revenue from contracts with customers

Produced by Tolley in association with

Corporation Tax

Guidance

Introduction

The adoption of new accounting standards commonly results in transitional tax adjustments for corporation tax purposes. This happens because the cumulative amount of income or expense recognised on the new basis as at the start of the year of adoption usually differs from the old basis.

In addition, there are usually deferred tax implications at the point of transition as a consequence of ‘catch-up’ adjustments taken to reserves on adoption of the new standard. Where the income of the comparative period is altered, then a deferred tax adjustment to that period is usually required although corporation tax for that year will remain undisturbed assuming the financial statements were prepared in accordance with the valid generally accepted accounting principles (GAAP) of that previous period. If the tax rules going forward mirror the accounting entries, then there will be no deferred tax balances at the end of the year of adoption of the new standard.

This

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Malcolm Greenbaum

Director and Principal Trainer at Greenbaum Training and Consultancy Limited

Malcolm is a UK Chartered Accountant and Chartered Tax Advisor winning the John Wood Medal in the November 1995 CIOT sitting for the best paper on business taxation. He was previously Director of Finance and Taxation Programmes at BPP Professional Education and has delivered IFRS, US GAAP, UK Tax and VAT training (at all levels from an introduction to the complexities of IAS 39) to a multitude of organisations world-wide since 1992. Malcolm has particular experience in delivering bespoke training programmes to multi-nationals in the financial services, transport and energy sectors as well as delivering UK tax and VAT update programmes to accounting and law firms. He is passionate about training and his enthusiasm ensures that the participants enjoy the learning experience whilst gaining knowledge through their engagement in the sessions and through encouraging them to ask questions and discuss practical issues they may have. Malcolm also provides consultancy services to companies and accounting firms, including provision of VAT advice, reviewing accounting policy manuals and advising on accounting treatments of various transactions. In his spare time, Malcolm enjoys flying having gained a Private Pilot's Licence in 2014.

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