Impact of the Application of IFRS 15 on the Profitability of Jordanian Telecom Companies (Case Study: Jordan Orange Telecom)

Abstract

This study investigates the impact of applying IFRS 15 standard on the profitability of Jordanian telecommunications companies (case study: Jordan Orange Telecom). The study addresses three independent variables, namely, contract revenue, customer contract assets and customer contract liabilities and their impact on the ROA, ROE and PM in Orange Jordan. The researcher has investigated the relationship and impact of the independent variables on dependent variables by analysing financial statements after applying IFRS15 for 2017, 2018, 2019. The study concludes that there is a relationship and impact between contract revenue and ROA and ROE, where the correlation coefficient amounted to (99.8, 99.0) respectively, with a level of significance (0.02, 0.04). The coefficient of determination (R2) amounted to (99.6%), indicating that contract revenue interprets (99.6%) of the return on assets in Orange Telecom. Also, the coefficient of determination (R2) amounted to (99.9%), indicating that contract revenues interpret (99.9%) of the ROE in Orange Telecom. The correlation coefficient between contract revenue and PM amounted to (99.2) with a level of significance (0.08), where a correlation relationship is noticed but with a level of significance exceeding (0.05). As for customer contract assets and customer contract liabilities, no relationship or impact is found betweem these and ROA, ROE and PM in Jordan Orange Telecom.Accordingly, the study recommends that companies in Jordan should abide by IFRS15 in order to increase corporate profitability.