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© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Investment
management
IFRS 15 Revenue – ...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Areyougoodtogo?
2
IFRS 15 will change th...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
3
For each of the following,
documenting...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Identifyingthecustomer
4
Who is the cust...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
5
… then commissions paid for
introducin...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Up-frontfees
6
Account for as a
promised...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Performanceobligations
7
Do additional s...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Variableconsideration
8
Think about…
Cla...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Contractsinthescopeofmultiplestandards
9...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Principalvsagent
10
Have you reassessed ...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Transitionadjustments
11
Have you identi...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Disclosurerequirements
12
Have you ident...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Checklistofactions
Have you…? 
Identifi...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Howdidyoudo?
14
How many of our nine que...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Don’tforgetthebroaderbusinessimpacts
Hav...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
Findoutmore
16
Talk to your
usual KPMG
c...
© 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved.
© 2017 KPMG IFRG Limited, a UK company l...
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Investment management | IFRS 15 Revenue – Are you good to go?

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Practical guidance for investment managers on implementing the new revenue recognition standard. Find out more at kpmg.com/ifrs.

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Investment management | IFRS 15 Revenue – Are you good to go?

  1. 1. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Investment management IFRS 15 Revenue – Are you good to go? July 2017 kpmg.com/ifrs
  2. 2. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Areyougoodtogo? 2 IFRS 15 will change the way many investment management companies account for their contracts. To help you drive your implementation project to the finish line, we’ve pulled together a list of key considerations that many companies in your sector need to focus on.
  3. 3. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. 3 For each of the following, documenting your analysis and the conclusions drawn will be essential
  4. 4. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Identifyingthecustomer 4 Who is the customer in your contracts? The fund The fund’s investorsor For a fund manager, is it…
  5. 5. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. 5 … then commissions paid for introducing new investors may not meet the criteria for capitalisation Coststoobtainacontract Does your accounting policy for commission costs meet the requirements of IFRS 15? If the fund is the customer…
  6. 6. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Up-frontfees 6 Account for as a promised service Account for as an advance payment on future services Yes No Do up-front fees relate to specific services transferred to the customer? Consider whether the fee… ― gives rise to a significant financing component; or ― represents a material right How will you account for up-front fees?
  7. 7. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Performanceobligations 7 Do additional services promised in the contract meet the new ‘distinct’ test to be accounted for separately? Think about… Administrative services | Custody services | Distribution services | Renewal options A good or service is distinct if it is… Capable of being distinct Distinct in the context of the contract+
  8. 8. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Variableconsideration 8 Think about… Claw-back arrangements | Management fees | Performance fees Expected value If the contract price contains variable consideration, have you decided on the estimation method and applied the constraint ? Most likely amount or Could there be a significant revenue reversal?
  9. 9. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Contractsinthescopeofmultiplestandards 9 Have you applied the allocation guidance to contracts that also include a financial instrument? Total contract amount IFRS 9 amount IFRS 15 amount, which may be nil - =
  10. 10. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Principalvsagent 10 Have you reassessed whether you are acting as principal or agent under IFRS 15? Identify the service to be transferred to the customer Did you control that service before the transfer? Acting as principal – gross revenue Acting as agent – net revenue Yes No Think about… Sub-advisers and other subcontractors
  11. 11. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Transitionadjustments 11 Have you identified all of the areas where differences exist between IFRS 15 and your existing accounting? Use the helpful guidance in our Transition Options and Issues In-Depth publications IFRS 15 is more detailed than the existing revenue requirements, so you may find unexpected changes in your accounting !
  12. 12. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Disclosurerequirements 12 Have you identified the additional information and processes needed to meet the disclosure requirements? Read our Guide to annual financial statements – IFRS 15 supplement Under IFRS 15, you’ll need to provide more detailed information about contract terms, as well as how and when you recognise revenue
  13. 13. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Checklistofactions Have you…?  Identified the customer in your contracts?  Checked that your accounting policy for costs to obtain a contract meets IFRS 15’s requirements?  Determined whether up-front fees transfer specific services to the customer?  Determined whether your contracts include more than one performance obligation?  Revised your estimates of variable consideration elements?  13 Have you…?  Determined whether your agreements are in the scope of multiple standards?  Reassessed whether you are acting as principal or agent under IFRS 15?  Identified and quantified your transition adjustments?  Identified the additional information needed to meet the disclosure requirements? 
  14. 14. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Howdidyoudo? 14 How many of our nine questions have you answered ‘yes’? All 9 – You’re good to go! 5-8 – You’re on your way 0-4 – You really need to engage
  15. 15. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Don’tforgetthebroaderbusinessimpacts Have you… ― updated your management reporting, including KPIs? ― developed a transition plan for parallel runs, including reconciliations? ― thought about the tax implications? ― calculated the impact on bonus schemes? ― compared your approach with peers? Revenue Accounting Change Accounting, tax and reporting Data, systems and processes Business People and change 15
  16. 16. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. Findoutmore 16 Talk to your usual KPMG contact Use our Transition toolkit Follow the discussion on LinkedIn
  17. 17. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. © 2017 KPMG IFRG Limited, a UK company limited by guarantee. All rights reserved. KPMG International Standards Group is part of KPMG IFRG Limited. KPMG International Cooperative (“KPMG International”) is a Swiss entity that serves as a coordinating entity for a network of independent firms operating under the KPMG name. KPMG International provides no audit or other client services. Such services are provided solely by member firms of KPMG International (including sublicensees and subsidiaries) in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any other member firm, nor does KPMG International have any such authority to obligate or bind KPMG International or any other member firm, in any manner whatsoever. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. kpmg.com/socialmedia

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