Transitioning to the IFRS15/USGAAP- ASC606 Standards

Date of Initial Adoption, Full Retrospective and Modified Retrospective


What is "Date of Initial Adoption"?

Date of Initial adoption is the date on which the entity first applies IFRS 15/USGAAP ASC 606 standard. IFRS15 was issued in May 2014 and applies to an annual reporting period beginning on or after January 1, 2018. An early adoption is also permitted


What are "Full Retrospective" and "Modified Retrospective" methods? What is the difference?

In a Full Retrospective method, IFRS 15 is applied retrospectively to each prior reporting period with a calculation of cumulative catch-up at the start of comparative period In a Modified Retrospective method, IFRS 15 is applied from the date of adoption. Therefore, cumulative catch up is calculated at the date of adoption.






Above example depicts Full Retrospective transition method with a transfer date - 01/01/2016 and a date of adoption – 01/01/2018.

Between the transfer date and the date of adoption, the company reports based on the old standard and provides comparative figures for the new accounting standard. The financial statements published are based on the old accounting standard. Cumulative catchup us calculated on transfer date.





Above example depicts Modified Retrospective transition method with a date of adoption – 01/01/2018.

With the date of adoption as January 1, 2018, the entity will add the new accounting standard. The cumulative catch-up is calculated and posted at the date of adoption on January 1, 2018.


VGenio Approach


VGenio has developed a use case simulator that has the following capabilities:

  • Capability of calculating the revenue allocation for a product with multi-element arrangement.

  • Capability with input fields for contract price, standalone selling price/POB percentage assignment, tenure.

  • Capability to show the financial postings for the first month.


This simulator can be used for the following purposes:


  • To build use cases for rev-rec implementation.

  • During the testing phases as it reduces calculation time and therefore provides huge assistance in validation

  • Designing the test scripts




Contact VGenio Consulting Inc by visiting the web site- https://www.vgenio.com




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