When IFRS 15/AASB 15 Revenue from Contracts with Customers was released, the accounting firm BDO issued a short document entitled IFRS Industry Issues: Construction and Real Estate. In the document they stated:
The adoption of IFRS 15 may lead to significant changes in the pattern of revenue and profit recognition. Careful consideration and planning will be needed for a range of issues, including the effect on:
• Compliance with bank covenants;
• Performance based compensation.
Explain the possible reasoning behind the above advice.