Content of Course

FRS 102 introduces a fundamentally different approach to revenue recognition for accounting periods beginning on or after 1 January 2026. Whist the impact of the other major change being introduced (lease accounting) is easy to explain and visualise, it is difficult for firms and management of clients to identify and deal with the more subtle but arguably more important changes to revenue recognition.

The revised standard replaces the familiar risks-and-rewards approach with a more structured five-step model based on the transfer of control. Although the new requirements are intended to improve consistency and comparability, they also introduce new judgements, terminology and documentation expectations that will affect many audit engagements. Many firms therefore recognise the need targeted training so they can identify where the revised rules may change the timing, amount and presentation of revenue, and so they can respond appropriately.

The need for training is particularly strong because the new model requires auditors to assess revenue using a sequence of linked judgements: identifying the contract, identifying distinct performance obligations, determining the transaction price, allocating that price appropriately, and deciding whether revenue is recognised over time or at a point in time. Each of those stages can create risk. A contract that previously appeared straightforward may now require a different analysis if it contains multiple deliverables, variable amounts, customer incentives, financing features, contract modifications, or indicators that the entity is acting as principal rather than agent. Without a sound understanding of those issues, firms may fail to identify material misstatements or may underestimate the extent of audit work required.

This practical course, led by HAT’s Managing Director, Andrew Jarvis together with Vimbai Mahoya who has significant practical experience supporting entities and engagement teams through the same process when introduced by IFRS 15 provides attendees with:

1. A reminder of the new five step model and key differences from current practice
2. Common problem areas of complexity, how to identify and deal with these
3. The practicalities of transition and examples of different scenarios are reflected
4. Examples of problem scenarios
5. Next steps for firms and clients