GetSwift Ltd & AASB 15: Revenue Recognition Impact - ACCT3004

This report provides an analysis of the impact of the new revenue standard (AASB 15) on GetSwift Ltd, a company specializing in delivery management solutions. The letter of advice explains how AASB 15, which replaces AASB 118 and AASB 111, will affect GetSwift's revenue recognition system. I...Read More

Running head: COMPANY ACCOUNTING
Company Accounting
Name of the Student:
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Author Note

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Table of Contents
Letter of Advice...............................................................................................................................2
Transmittal email.............................................................................................................................4
References........................................................................................................................................6

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Letter of Advice
To: Getswift Ltd (management)
From: Advisor (Consultancy firm)
Date: 9th April, 2018
Sir,
This is a letter of advice that is primarily prepared for the purpose of advising the
management of Getswift Ltd for understanding the changes that the particular way in which
thenew revenue standard will impact the revenue recognition system of the corporate entity.
Getswift Ltd is a corporate organization that deals in the management of the delivery in
regards to particular business houses. To be precise, the firm removes a considerable degree of
complication out of the system of local delivery. The firm also engages in the optimizing the
routes that will effectively facilitate the saving of the time and money of the client organization.
The streamlining and the dispatching features that suit the business model is also facilitated by
the corporate organization of Getswift Ltd. Moreover, the alerts in regards to the tracking of the
deliveries is also facilitated by the corporate organization of Getswift Ltd. Therefore, it can be
understood that the corporate entity of Getswith Ltd provides the essential services which eases
the particular proceedings of the business. It has been mentioned in the financial report of the
company that the financial statements have been prepared on the basis of the Corporations Act
2001 and the Australian Accounting Standards Board. Moreover, the firm has prepared the
financial statements on an accrual basis that has been based on the historical (Holland 2016).

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It has been further stated in the annual report of the company for the financial year of
2017 that the particular estimates and the related assumptions that have been undertaken by the
management of the corporate entity has been founded upon the historical experience. This means
that the proceedings of the accounting firm has been based upon historical experience rather than
being based upon the stated standards as established by the Australian Accounting Standards
Board. Furthermore, along with the historical experience the accounting system of the firm has
also been based upon various other factors that have been believed to be sustainable and
reasonable in regards to the particular instance (Joubert, Gatvie and Parle 2016). Therefore, it
can be concluded that the entire accounting and financial proceedings of the firm have been
carried out on the basis of historical experience. It must be noted here that the actual results may
vary by a high degree with the estimated results. This is due to the fact that particular accounting
treatments derived from the historical cost foundation might not always be correct resulting in
variation of the obtained actual results. thas also been mentioned in the annual report of the
company that the revision to the accounting estimates have been recognized in the particular
stipulated period or that financial year in which the revision impacts only that period. Here it has
been mentioned that there had been certain changes in the accounting policies that have been
adopted by the financial entity of Getswift Limited. These changes in the accounting policies
have been carried out on the basis of the changes in the particular accounting standards that have
been carried out by the Australian Accounting Standards Board ( Kominos and Cameron 2016)
The change in the revenue recognition system that has been undertaken by the financial
entity is in regards to AASB 15. The particular accounting standard of AASB 15 replaces the
accounting standard of AASB 118 Revenue and AASB 111 Construction Contracts and other
interpretations that are related to the financial component of revenue. These accounting standards

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result in the establishment of a new revenue recognition model. Moreover, the adoption of this
particular accounting standard results in the essential changes that acts as the foundation for the
purpose of determining when the financial component of revenue has to be recognized that is
over time or at a particular point of time. Moreover, the new revenue standard also aims to focus
on the specific topics in regards to revenue recognition system like the arrangement of the
multiple elements, variable degree of pricing, rights of return and particular insight into the
accounting treatment in regards to the processes of licensing and warranting.
The impact of the adoption of AASB 15 on Gateswift Ltd can be listed down as follows:
 The firm might experience changes in the timing and amount of revenue that has to be
recognized
 The requirement for the providence of new disclosure might be necessary in the financial
report of the corporate entity
 The key performance indicators and the ratios that determine the performance of the
business might as well change. This is certain to have an impact upon the share price of
the company and the availability of capital
 The investors of Gateswift Limited also are required to be educated sufficiently on the
upcoming changes in the revenue profile of the company.
Therefore, the revenue standard will affect the revenue recognition system of the
company in these ways.
Transmittal email
April 4th, 2018

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Gateswift Limited (management)
Subject: impact of the new revenue standard
Sir,
This particular web mail has been composed in order to clarify the factors in regards to
how the new revenue accounting technique affects the revenue recognition system of the firm.
Moreover, the particular changes that have been brought about by the adoption of the new
revenue accounting standard has been discussed further.
It has been further explained in the report that the adoption of the new revenue standard
that is the AASB 15 will affect the revenue recognition system of the company by changing the
time and the amount of revenue that will be recognized by the firm in a financial year. Moreover,
the requirement for the providence of new disclosure might be necessary in the financial report
of the corporate entity and the investors might need to be educated in the utilization and the
application of the new accounting standard.
Therefore, it might be concluded that the impact of AASB 15 will positively affect the
financial status of the company and will in turn increase the ethical standards of the financial
statements.

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References
AASB CA. Business Combinations. Disclosure. 2014 Jun 4;66:77.
AASB CA. Financial Instruments. Project Summary. 2014.
Holland D. Simplifying income recognition for not-for-profit entities. Governance Directions.
2016 Dec;68(11):666.
Jones D. Tax and accounting income-Worlds apart?. Taxation in Australia. 2017 Jul;52(1):14.
Joubert M, Garvie L, Parle G. Implications of the New Accounting Standard for Leases AASB
16 (IFRS 16) with the Inclusion of Operating Leases in the Balance Sheet. Journal of New
Business Ideas and Trends. 2017;15(2):1-1.Dakis GS. Upcoming changes to contributions and
leasing standards. Governance Directions. 2016 Mar;68(2):99.
Komninos J, Cameron RB. IMPACTS OF REVENUE RECOGNITION CHANGES IN THE
CONSTRUCTION INDUSTRY.