IFRS 15 Revenue from contracts with Customers Essay

IFRS 15 Revenue from contracts with Customers - Essay Example In addition, discussion of the key elements of the IFRS 15 and challenges facing entities will be undertaken. In conclusion, potential improvement in global performance reporting as a result of implementing the IFRS 15 will be identified. According to Wagenhofer (2013), effective and comprehensive revenue recognition framework plays a pertinent role in the provision of financial information to capital markets and facilitation of performance evaluation. Wagenhofer (2013) therefore noted that the information of revenue was important for the following purposes; informing capital providers, facilitation of performance evaluation and in the management of earnings. Revenue information underpins the effectiveness of the decision-making framework of capital providers (Holt 2013b). Information on revenue provides the basis of performance measurement by major companies thereby serving as the fundamental indicator of the financial status of the company. McConnell (2014) noted that the reporting on revenue provides the company’s financial information that includes gross income, gross profit and net income. Vis a vis, revenue provides capital marketers with vital valuation information within a given period. Assessment of t he revenue by financial analysts provides information on the size of the company and the trajectory of the growth pattern of the company. Additionally, revenue enables financial analysts to project future performance and growth of the company based on financial records such as market demand for the goods and services of the company. Therefore, comprehensive revenue information adequately advices investors and financial analyst on the current status of the company. Revenue information is further crucial in the management of the operations of a company. Revenue serves as a key tool in the evaluation of the performance of a company. According to Holt (2013c), most companies are guided by the statistics of their revenue in setting performance