Global consumer goods companies and retailers are going through turbulent yet exciting times, as they reshape their organizations to respond to the disruption caused by new regulations, technologies, changing demand and consumer expectations.
These social, technological and regulatory changes demand an adaptation of in-house accounting practices to accommodate new ways.
Specifically, the new revenue recognition standard IFRS 15 — Revenue from Contracts with Customers introduces a complex five-step model for revenue recognition, and while it may not have a broad impact on some aspects of the retail and consumer industry, certain areas will be significantly affected, such as timing of revenue recognition and treatment of customer incentives and loyalty programs. Business arrangements in the retail and consumer industry are often uniquely tailored to the parties and the facts and circumstances of each contract should be scrutinized when applying the new standard.
Most retailers are also common users of lease arrangements for their real estate and will inevitably experience the major accounting and operational impacts of the new IRFS 16 – Leases, applicable on or after 1 January 2019. We offer our technical expertise to help companies dig in these important tasks.
We can offer our expertise to help consumer market companies relieve a number of problems, including:
- Review your existing types of incentives and loyalty programs and apply the new IFRS 15 guidance for variable consideration that is different from the existing guidance under IFRS. For each distinct type we can identity and measure the additional performance obligations, which can affect the timing and amount of revenue recognition;
- Transition to IFRS 16 accounting (calculation of the retrospective effect of IFRS 16 or calculation of the cumulative effect to opening equity);
- Navigating you though the complex decision making three of determining whether a contract contains a lease (in addition to the “benefits” element, IFRS 16 has introduced the so called “power” element to the discussion).
We help the consumer markets companies with accounting and reporting services such as:
More than 30 jurisdictions across Europe require IFRS standards for listed financial institutions or public interest entities (PIEs). Others are on the path to either full acceptance or – at the very least – dual compliance. We can help you be compliant and confident in your numbers.Learn more
In modern capital markets, accounting and financial reporting are becoming increasingly complex. IFRS issues need to be anticipated in advance and resolved timely in order to preserve the value of the business and avoid regulatory sanctions. Let us help with that.Learn more