Business
Statement re: Adoption of IFRS 15
Statement re: Adoption of IFRS 15.
About this update from Babcock International Group Plc
[{"type":"text","content":"\n \nRNS Number : 8912Y Babcock International Group PLC 11 December 2017 \n\n \n11 December 2017\n \nBabcock International Group PLC (Babcock or the Group)\nBabcock confirms no changes required in preparation for the adoption of IFRS 15\n \nBabcock confirms that it believes the adoption of International Financial Reporting Standard (IFRS) 15 will not require a change in contract revenue or profit recognition. This demonstrates that the Group continues to maintain a conservative contract accounting approach.\n \nIn preparation for the adoption of IFRS 15, our auditors have reviewed our existing contracts and we are able to make the following statement:\n \n\"IFRS 15, 'Revenue from Contracts with Customers', effective from 1 January 2018 and endorsed by the EU identifies performance obligations in contracts with customers, allocates the transaction price to the performance obligations and recognises revenue as performance obligations are satisfied. The standard requires revenue recognition either \"over time\" or at a \"point in time\" and additionally requires more detailed disclosures. \n \n\"We have completed a detailed review of all material contracts, including consideration of all types of contracts undertaken by the Group and the results of our review confirm that IFRS 15 will not result in a material change to the timing of revenue or profit recognition on service provision contracts or long-term service contracts. This assessment reflects that the Group's contracting arrangements, which are predominantly long term service contracts, result in the continual transfer of the benefits of the Group's performance to customers over time. \n \n\"The review also indicates that the new standard is not expected to introduce any material change to the Group's revenue recognition policy in relation to revenue from the sale of goods not under service provision contracts or long-term service contracts. Point in time recognition of revenue will continue to apply to such contracts.\" \n \nBabcock has always adopted a prudent approach to contract accounting with an emphasis on identifying and managing risk throughout the life of the contract. Transparent financial control processes ensure that recognition of profits and cash flow are aligned closely with the deliver...