IFRS 15 vs ASC 606: revenue differences

If you report under both frameworks, or move between them, you need to know where IFRS 15 and ASC 606 still differ. This guide lists every difference that changes the numbers or the notes, explains why it exists, and shows one contract that lands differently.

By Awais Jameel, Chartered Accountant. Reviewed by Muhammad Bilal, Chartered Accountant. Checked against official sources on . 3 minute read.

Short answer

IFRS 15 vs ASC 606 is a comparison of two almost identical standards: they share the same core principle and five-step model, because the IASB and FASB wrote them together. The differences between IFRS 15 and ASC 606 are narrow but real: the collectibility threshold, how licences are classified, policy elections for shipping and handling and sales taxes, whether contract cost impairments can be reversed, and how much private companies must disclose.

At a glance

Core model
Same five steps
Collectibility
US threshold is higher
Licences
Different classification route
Shipping and handling
US policy election
Contract cost impairment
Reversal under IFRS only
Private companies
US reliefs
IFRS 15 vs ASC 606: revenue differencesCore model: Same five steps; Collectibility: US threshold is higher; Licences: Different classification route; Shipping and handling: US policy election; Contract cost impairment: Reversal under IFRS only; Private companies: US reliefs.KEY FACTS AT A GLANCEIFRS 15 vs ASC 606: revenue differencesCore modelSame five stepsCollectibilityUS threshold is higherLicencesDifferent classificationrouteShipping and handlingUS policy electionContract cost impairmentReversal under IFRS onlyPrivate companiesUS reliefsChecked against official sourcesTax BakersIFRS 15 vs ASC 606: revenue differencesCore model: Same five steps; Collectibility: US threshold is higher; Licences: Different classification route; Shipping and handling: US policy election; Contract cost impairment: Reversal under IFRS only; Private companies: US reliefs.KEY FACTS AT A GLANCEIFRS 15 vs ASC 606: revenuedifferencesCore modelSame five stepsCollectibilityUS threshold is higherLicencesDifferent classification routeShipping and handlingUS policy electionContract cost impairmentReversal under IFRS onlyPrivate companiesUS reliefsChecked against official sourcesTax Bakers
Key facts at a glance, as set out in this guide.

IFRS 15 vs ASC 606: how similar are they?

Very. Both were issued in 2014 from a joint project and share the core principle, the five steps, the guidance on variable consideration, allocation, principal versus agent and contract costs. Most companies get the same answer under either. The two boards made a few changes afterwards, separately, which is where the differences come from.

What are the differences between IFRS 15 and ASC 606?

IFRS 15 vs ASC 606 at a glanceIFRS 15 vs ASC 606 at a glanceTOPICIFRSUS GAAPFive-step modelSameSameCollectibility barMore likely than notLikelyLicence classificationAccess or useFunctional or symbolicSales tax electionNot allowedAllowedShipping cost electionNot allowedAllowedReverse cost impairmentAllowedNot allowed
Same model, a handful of differences in thresholds and policy elections.
AreaIFRS 15ASC 606
Collectibility threshold for a contractProbable, meaning more likely than notProbable, meaning likely to occur, a higher bar
Licences of intellectual propertyRight to access or right to use, based on whether licensor activities significantly affect the IPFunctional or symbolic IP
Licence renewalsNo specific guidanceRevenue not recognised before the renewal period starts
Shipping and handling after control passesAssess as a possible separate serviceMay elect to treat as a fulfilment cost
Sales and similar taxesAssess each tax: collected for a third party or notMay elect to exclude all sales taxes from the transaction price
Non-cash considerationMeasurement date not specifiedMeasured at contract inception
Immaterial promisesMateriality applies generallyMay ignore promises immaterial in the context of the contract
Contract cost impairmentReversed if conditions improveNever reversed
DisclosuresSame for all entitiesReliefs for private companies; more interim disclosure for public companies

An example: a doubtful customer

A software company signs a contract with a start-up for $120,000. It judges the chance of collecting in full at about 60%: more likely than not, but not likely.

  • IFRS 15: collection is probable in the IFRS sense, so a contract exists and revenue is recognised as the company performs, with expected credit losses provided for separately under IFRS 9.
  • ASC 606: collection is not probable in the US sense, so no contract exists yet. Cash received is a liability until the contract criteria are met, the company has stopped transferring goods or services and received non-refundable payment, or the contract is terminated.

The same contract can produce revenue in one framework and a liability in the other.

Why do the licence rules differ?

The FASB classifies intellectual property by its nature: functional IP, such as software or film, has standalone functionality and is usually recognised at a point in time; symbolic IP, such as a brand, is recognised over time. The IASB asks whether the licensor's activities significantly affect the IP. Most licences end up in the same place, but boundary cases, such as media content that the licensor keeps promoting, can differ. See IFRS 15 licences.

Do the differences affect many companies?

For most companies the answers are identical, because the differences sit in narrow areas: customers with weak credit, licences near the functional-symbolic boundary, and the policy elections. Groups most likely to see differences are media and entertainment companies with licensing income, and businesses selling to start-ups or customers in distressed sectors, where the collectibility threshold matters.

What should dual reporters watch?

  • Map each policy election made under US GAAP, such as sales taxes and shipping, to its IFRS treatment.
  • Track contract cost impairments separately, since only IFRS reverses them.
  • Reassess contracts with weaker customers, where collectibility can change the answer.

For the full models, see IFRS 15 explained and ASC 606 explained.

Need help applying the standards?

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Questions people ask

What is the difference between IFRS 15 and ASC 606?

They share the same five-step model. Differences include the collectibility threshold, licence classification, policy elections for sales taxes and shipping, and reversal of contract cost impairments.

Is collectibility assessed differently under IFRS 15 and ASC 606?

Yes. Both say probable, but US GAAP means likely to occur, which is a higher threshold than IFRS's more likely than not.

Can contract cost impairments be reversed?

Under IFRS 15, yes; under ASC 340-40, no.

Are IFRS 15 and ASC 606 converged?

Substantially, but not fully. A small number of differences remain.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IFRS 15 Revenue from Contracts with Customers
  2. FASB Accounting Standards Codification: Topic 606, Revenue from Contracts with Customers

Rules and fees change. If you are reading this long after October 4, 2026, confirm the figures with the source before you rely on them.

IFRS 15IFRS 15 revenue from contracts with customers explainedASC 606ASC 606 revenue recognition explainedAccounting standardsIFRS vs US GAAP: the key differences in one guide

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This guide is general information. It is not tax or legal advice for your situation.