You are the staff accountant at a local software development company, SIA Bloviation. Your company develops various applications, and sells them (Think Tilde). Bloviation does research and development on new products; updates and upgrades existing products; sells stand-alone software for installation on individual and network PC's, subscription based online applications and custom developed applications.

Your company prepares the local and European group accounts based on IFRS. However, as you are owned 100% by a US parent company, Bloviator Inc., you must also provide an annual reporting package that converts your IFRS accounts into US GAAP that the parent uses to prepare its US Consolidated Accounts.The reporting package consists of a balance sheet, income statement and statement of equity.

Recently, IFRS (and US GAAP) changed the standards for revenue recognition. The new standards IFRS 15/ASC 606 will have a significant effect on how your company accounts for revenue from contracts with customers.These standards were developed jointly by the FASB and IASB, however there are some differences between them.This may affect how you report revenue under IFRS and US GAAP

Your boss has informed you that you will be in charge of revenue accounting next month. To prepare, they have asked you to review several online seminars and e-learning courses to better understand the new standard

1. explains the basic concept and process of revenue recognition under the new IFRS standard

2. provides an example transaction of how to account for subscription-based revenue.

3. provides a summary of the primary differences between IFRS 15 and ASC 606, and an explanation how that will affect the US GAAP reporting package.

All appropriate references to the various paragraphs of the standards must be provided, so that management can review in further detail.