IFRS 15

IFRS 15 is the IASB standard governing revenue recognition under International Financial Reporting Standards. It was developed jointly with the FASB’s ASC 606, and the two share the same five-step model and the same core principle: recognise revenue as control of the promised good or service transfers to the customer.

For most SaaS contracts the two standards produce identical answers, which is the point — convergence was the objective.

Where they diverge

The differences are narrow but real, and they matter to companies reporting under both:

• Collectibility threshold. ASC 606 uses “probable” in the US GAAP sense of roughly 75–80% likely; IFRS 15 uses “probable” meaning more likely than not. The IFRS bar is lower.
• Licence renewals and the timing of revenue on some renewal arrangements are treated slightly differently.
• Impairment reversals on capitalised contract costs are permitted under IFRS and prohibited under US GAAP.
• Practical expedients on transition differed, which now mostly matters for historical comparatives.

Who needs to care about both

Any company with subsidiaries reporting under different frameworks — a US parent with an EU or APAC entity, or the reverse. In practice that means multi-entity operations need revenue schedules that can be produced under either basis from the same underlying contract data, rather than one authoritative set and a manual adjustment.

Building that as a reconciliation between two systems is where the effort goes. Building it as two views over one contract record is considerably less painful, and is the reason entity structure and revenue recognition tend to be evaluated together when a company expands internationally.