Revenue – ifrs 15 handbook

Disclosure relief only
This expedient is a disclosure exemption only – it does not grant an entity 
any relief from applying the requirements of the standard to its contracts 
retrospectively, subject to the use of other practical expedients.
13.3 
Cumulative effect method
IFRS 15.C3(b), C7A
Under the cumulative effect method, an entity applies the new standard as of the 
date of initial application, without restating comparative period amounts. The entity 
records the cumulative effect of initially applying the new standard – which may 
affect revenue and costs – as an adjustment to the opening balance of equity at the 
date of initial application. 
Under the cumulative effect method, an entity can choose to apply the 
requirements of the standard to:
– only contracts that are not completed contracts at the date of initial application; or 
– all contracts at the date of initial application.
An entity that applies the cumulative effect method may also use the contract 
modifications practical e).
An entity can choose to apply the practical expedient to all contract modifications 
that occur before either the: 
– beginning of the earliest period presented; or
– date of initial application.
IFRS 15.C8
An entity that elects the cumulative effect transition method is also required to 
disclose the following information: 
– the amount by which each financial statement line item is affected in the current 
period as a result of applying the new standard; and 
– an explanation of the significant changes between the reported results under the 
new standard and those under previous requirements.

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338 | Revenue – IFRS 15 handbook