Transport companies – Implementing IFRS 15

Transport companies – Implementing IFRS 15

We look at possible impacts of IFRS 15, actions that may be needed, and how KPMG can help.

Transport IFRS 15 leaflet image: Busy train station

The new revenue standard will result in significant impacts across the sector.

Now that the IASB and FASB have published a new joint standard on revenue recognition, the real work for transport companies is just beginning.

We look at how IFRS 15 Revenue from Contracts with Customers will affect companies in the transport sector, and how KPMG can help.


Transport companies will need to carefully consider the impacts of the new standard.

In particular, some revenue may be recognised earlier than today, whilst some costs may be deferred. And the new disclosure requirements are extensive.

However, the impacts will be felt far beyond accounting change. A number of sector-specific arrangements will be affected, including loyalty programmes and rebates.


The guidance on customer loyalty programmes in the new standard is broadly similar to IFRIC 13 Customer Loyalty Programmes – i.e. the loyalty points are treated as a separate performance obligation from the passenger ticket with which they were granted.

However, companies will need to assess whether their method for determining the amount of consideration that should be allocated to loyalty points remains acceptable.

Under the new standard, this amount is based on the stand-alone selling price of the loyalty point – rather than fair value, as at present. It also takes into account the likelihood of redemption. This may not always be easy to establish.

Possible methods include:

  • the stand-alone price at which loyalty points are sold to third parties – e.g. credit card companies who give miles for qualifying spend; or
  • estimates based on cost and a reasonable margin.

The new standard permits the residual approach – whereby a company allocates consideration between the sales transaction and the loyalty points – but most loyalty programmes are unlikely to meet the specified criteria.


Under the new standard, customer rebates – e.g. a rebate of 5% of the fee when a customer reaches a specified threshold of tonnage shipped – are treated as variable consideration.

Variable consideration is included in the transaction price at the company’s best estimate, and only to the extent that it is highly probable that there will be no significant revenue reversal.

Some transport companies will see a change to their revenue recognition profile under the new standard. For example, in early periods you may need to assume more rebates – and therefore recognise less revenue – than under current practice, particularly for new customers or new markets where you have less experience on which to base your estimates.

If you have arrangements involving rebates, you may need to determine their impact on the transaction price.

You may also need to consider whether your systems are capable of providing the data needed to estimate variable consideration, and whether you have adequate internal controls to support the estimates.


Read Accounting for revenue is changing: Impact on transport companies (PDF 221 KB) to further understand how these and other transport sector-specific arrangements are affected, and the actions you may need to take.

It gives examples of how our cross-functional team of experts has helped clients across various sectors – including transport – with the accounting and operational challenges of the new revenue standard.

These include: 

  • performing an overall impact assessment to identify the key revenue streams that may be impacted;
  • performing a detailed accounting diagnostic to identify and prioritise the impacts on accounting policies and disclosures, including information gaps; and
  • identifying and analysing key contracts under the IFRS 15 lens.

Please speak to your usual KPMG contact if you would like to find out more about how KPMG can help your business.For KPMG’s most recent publications on the new standard, visit our IFRS – Revenue hot topics page.

© 2023 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.

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