Revenue – ifrs 15 handbook

Dual reporting still required
IFRS 15.C8
An entity electing the cumulative effect method will still be required to maintain 
dual reporting for the year of initial application of the new standard to disclose 
the effect of adoption on line items in the statements of financial position, 
comprehensive income and cash flows because of the requirement to disclose 
the difference between: 
– revenue and costs that would have been recognised under previous 
requirements in the current period; and 
– the amounts that are recognised under the new standard.
Cumulative effect method reduces comparability
The cumulative effect method automatically reduces comparability, because 
an entity does not restate its comparatives. However, if an entity chooses to 
apply this method to all contracts rather than just to open contracts, then the 
accounting result in the current period is similar to applying the full retrospective 
method. Although it does not provide the same level of comparability in the 
first set of financial statements as the retrospective method, it does result in a 
consistent starting point for all contracts held by an entity.
The outcome of applying the revenue standard only to incomplete contracts 
at the date of initial application under the cumulative effect method is similar 
to applying practical expedient 1 under the retrospective approach – i.e. not to 
restate contracts that are completed contracts at the beginning of the earliest 
period presented – except that the comparative periods would also be restated 
under the latter approach.
Choosing to apply the cumulative effect method to all contracts 
may improve comparability 
IFRS 15.BC445J–BC445L
If an entity elects to apply the cumulative effect method to all contracts, rather 
than only those not completed at the date of initial application, then this may 
result in financial information for the current reporting period that is more 
comparable with that of entities following the retrospective method.

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13 Effective date and transition | 341
13.4 Consequential amendments to other IFRS requirements
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