Revenue Disclosure Practices of Companies Within the Construction and Telecommunications Industries: Significant Judgements and Uncertainties

The inherent significance of revenue for companies and users of financial statements prompted many debates on revenue recognition that ultimately led to the development of IFRS 15: Revenue from contracts with customers. The adoption of IFRS 15 has resultantly increased consistency in revenue recognition within industries, improving overall comparability, understandability, and transparency of financial information. In applying IFRS 15, some areas would require management to make significant judgements and estimates. Judgments and estimates play an integral role in financial reporting and the disclosure thereof results in useful information for the users of financial statements. This study analysed the significant judgements made and uncertainties addressed by management concerning the IFRS 15 disclosures in the financial statements of listed telecommunications and construction industries. The study followed a qualitative approach based on an empirical content analysis. This included an index study and thematic content analysis to assess the existence and quality of disclosures in the financial statements of the selected companies. The findings of the index study suggest that the level of compliance within the telecommunications and construction industries is relatively consistent. The construction industry’s percentage of compliance is slightly lower than that of the telecommunications industry throughout the periods. The thematic content analysis suggests that the disclosures provided by management within the construction industry achieved, on average, a higher rating with a greater percentage of the population receiving an excellent rating. Over the period of review, the existence and quality of disclosures were improved to enhance the usefulness of the financial information for the users.