Technical Accounting Interview Questions: 25 Answers From Revenue Recognition to Leases

Technical accounting interview questions for financial accountants, audit seniors and technical roles cluster around a handful of standards: revenue (IFRS 15 and ASC 606), leases (IFRS 16 and ASC 842), financial instruments (IFRS 9), impairment and provisions, and what's changing next. In the UK and Ireland, expect FRS 102 too, because its revenue and lease sections changed for periods beginning on or after 1 January 2026. Below are 25 questions with what each one tests and a model answer we wrote, with links to the standard-setters and firm guidance behind each point.

The model answers are short on purpose. In an interview, give the principle first, then one example from your own work. If you're applying to an audit firm, our Big Four audit interview questions cover the competency and motivation side.

Key takeaways

• Technical accounting interviews concentrate on revenue, leases, financial instruments, impairment, provisions and upcoming changes.
• IFRS 15 and ASC 606 share the five-step model but differ in places, such as the collectibility threshold for 'probable'.
• IFRS 16 uses a single lessee model; ASC 842 keeps finance and operating leases and has no low-value exemption.
• FRS 102's revised revenue and lease sections apply to periods beginning on or after 1 January 2026, and IFRS 18 applies from 1 January 2027.
• Give the principle, the reason and one example from your own work in under a minute.

Revenue recognition questions (IFRS 15, ASC 606, FRS 102)

1. Walk me through the five-step model. What it tests: the foundation of every revenue question. Model answer: "Identify the contract; identify the performance obligations, meaning distinct promises; determine the transaction price, including variable consideration; allocate the price to each obligation based on relative stand-alone selling prices; and recognise revenue when or as each obligation is satisfied, which is when the customer obtains control." The IFRS Foundation summary sets out the same steps; IFRS 15 applies to periods beginning on or after 1 January 2018.

2. When is revenue recognised over time rather than at a point in time? Model answer: "Over time if the customer receives and uses the benefit as we perform (a cleaning service), if our work creates or improves an asset the customer controls (building on their land), or if the asset has no alternative use to us and we have an enforceable right to payment for work done to date. Otherwise it's at a point in time, judged on indicators such as legal title, physical possession and acceptance."

3. How do you decide whether an entity is principal or agent? Model answer: "Ask whether the entity controls the good or service before it's transferred to the customer. Indicators include being primarily responsible for fulfilment, carrying inventory risk and having discretion over price. A principal records gross revenue; an agent records only its commission or fee."

4. How do you account for a contract that bundles a product with a year of support? What it tests: applying steps 2 and 4 to a real contract. Model answer: "If the product and support are distinct, they're two performance obligations. Allocate the price on relative stand-alone selling prices, recognise the product revenue on delivery and the support revenue over the year. A 'free' element still gets an allocation."

5. Are IFRS 15 and ASC 606 the same? What it tests: US/UK awareness, common in groups reporting under both. Model answer: "They share the five-step model, but there are differences. One example: the collectibility test in step 1 relies on 'probable', which means 'likely to occur' under US GAAP but 'more likely than not' under IFRS, a lower threshold. So the two can reach different conclusions on whether a contract exists."

6. What changed in FRS 102 revenue recognition from 2026? Model answer: "Section 23 was replaced with a five-step model based on IFRS 15, with some simplifications, for periods starting on or after 1 January 2026. The old risks-and-rewards approach gave way to transfer of control, so some entities see the timing of revenue move." The FRC's FRS 102 page lists 1 January 2026 as the principal effective date of the Periodic Review 2024 amendments.

Lease accounting questions (IFRS 16, ASC 842, FRS 102)

7. How does a lessee account for a lease under IFRS 16? Model answer: "A single model. At commencement, recognise a lease liability at the present value of the lease payments and a right-of-use asset, usually equal to the liability plus initial direct costs and prepaid payments. Then depreciate the asset and unwind interest on the liability. Lessor accounting is largely unchanged from IAS 17."

8. What exemptions does IFRS 16 give? Model answer: "Short-term leases, meaning 12 months or less, and leases of low-value assets, such as a personal computer. Those can stay off balance sheet with a straight-line expense."

9. How is ASC 842 different for lessees? Model answer: "US GAAP keeps two models. Both finance and operating leases go on the balance sheet, but an operating lease keeps a straight-line expense presented as a single line, while a finance lease splits into amortisation and interest like IFRS 16. US GAAP also has no low-value asset exemption; IFRS 16's Basis for Conclusions refers to assets of around $5,000 or less when new."

10. What does IFRS 16 do to EBITDA, gearing and cash flow? Model answer: "EBITDA rises, because the old operating lease expense is replaced by depreciation and interest. Debt rises, because lease liabilities are on the balance sheet. Total cash doesn't change, but operating cash outflows fall as the principal repayments move to financing. Covenants and bonus targets based on EBITDA may need resetting." Lease effects on EBITDA also come up in investment banking analyst technical interviews.

11. What changed in FRS 102 lease accounting from 2026? Model answer: "For periods beginning on or after 1 January 2026, lessees no longer classify leases as operating or finance. They recognise a right-of-use asset and a lease liability, with exemptions for short-term and low-value leases. As a simplification, a lessee can discount using its obtainable borrowing rate instead of the incremental borrowing rate."

12. What discount rate do you use for a lease liability? Model answer: "Under IFRS 16, the rate implicit in the lease if it can be readily determined; otherwise the lessee's incremental borrowing rate. In practice lessees usually use the incremental borrowing rate, because they rarely know the lessor's residual value assumptions."

Financial instruments questions (IFRS 9)

13. How are financial assets classified under IFRS 9? Model answer: "On the business model and the cash flow characteristics. Amortised cost if held to collect contractual cash flows that are solely payments of principal and interest; fair value through OCI if held to collect and sell; fair value through profit or loss for everything else."

14. Explain the expected credit loss model. Model answer: "Three stages. Stage 1: on initial recognition, recognise 12-month expected credit losses. Stage 2: if credit risk has increased significantly, recognise lifetime expected losses. Stage 3: the asset is credit-impaired, lifetime losses continue, and interest revenue is calculated on the net amortised cost rather than the gross carrying amount."

15. When has credit risk increased significantly? Model answer: "It's a judgement using forward-looking information, but there's a rebuttable presumption that it has once contractual payments are more than 30 days past due. That's the latest point, not the trigger: an entity should usually spot the increase earlier."

16. How do most non-financial companies handle trade receivables? Model answer: "With the simplified approach: a lifetime expected loss allowance from day one, usually through a provision matrix based on ageing and adjusted for forward-looking information. No stage tracking is needed."

Impairment, provisions and other core questions

17. How is an impairment loss measured under IAS 36? Model answer: "Compare the carrying amount with the recoverable amount, which is the higher of fair value less costs of disposal and value in use. Any excess of carrying amount is the impairment loss. Goodwill and indefinite-life intangibles are tested every year, and a goodwill impairment is never reversed."

18. What's the difference between a provision and a contingent liability? Model answer: "A provision is recognised when there's a present obligation from a past event, an outflow is probable and the amount can be estimated reliably. If the obligation is only possible, or the outflow isn't probable, it's a contingent liability: disclosed, not recognised, and not even disclosed if the outflow is remote."

19. Why does deferred tax arise? Model answer: "Because the carrying amount of an asset or liability differs from its tax base. For example, if tax allowances run ahead of accounting depreciation, the asset's carrying amount exceeds its tax base, giving a deferred tax liability: tax that will be payable later as the difference reverses."

20. How is inventory measured? Model answer: "At the lower of cost and net realisable value under IAS 2. Cost includes purchase, conversion and other costs of bringing it to its present location and condition. A write-down to NRV is recognised as an expense straight away."

What's changing next

21. What is IFRS 18, and when does it apply? Model answer: "It replaces IAS 1 and applies to annual periods beginning on or after 1 January 2027. The headline changes are two required subtotals in the income statement, operating profit and profit before financing and income taxes, plus disclosure of management-defined performance measures and new rules on grouping items."

22. Which recent change has affected your work most? What it tests: that you've applied a standard, not just read it. Model answer (structure): name the change (FRS 102 leases, IFRS 18 planning, a revenue judgement), what you did (data gathering, contract review, a transition paper), the effect on the numbers, and one thing you'd do differently.

Judgement and process questions

23. How would you research a technical issue you haven't seen before? Model answer: "Read the standard and its application guidance first, then the firm or Big Four manuals, then look for how listed peers disclosed it. Write a short paper: facts, issue, options, the standard's requirements, conclusion and the effect on the numbers, and get it reviewed."

24. A client wants to recognise a large sale shipped on the last day of the year. What do you check? Model answer: "Whether control passed before year end: the contract terms, shipping terms, customer acceptance, whether the customer can return or cancel, and whether the goods were returned or the invoice was credited after year end. Late, large sales are a classic cut-off risk."

25. Where do judgement and estimates matter most in a set of accounts? Model answer: "Usually impairment (cash flow forecasts and discount rates), expected credit losses, provisions, revenue over time (measuring progress), lease terms with extension options, and deferred tax assets (whether future profits will be there). Those are the areas I'd expect an auditor to challenge first."

How to prepare

• Learn the principle behind each standard in one sentence, then attach one example from your own work. Interviewers move quickly to "how did you apply that?".
• Know which framework the employer reports under: IFRS, FRS 102 or US GAAP. A UK subsidiary of a US group may use all three.
• Prepare a two-minute story on one technical judgement you made. Our STAR interview examples for finance show how to structure it, and our guide to finance CV achievements helps you describe the outcome honestly.
• Make sure your CV shows the standards you've worked with. Our audit senior CV example shows how to word technical work, and the tailoring guide helps match it to the advert.
• Rehearse the answers out loud. Our interview practice tool asks questions written for a specific job and your CV, and rates each answer.

The candidates who stand out give the rule, the reason for it and a real example in under a minute, and they know where their employer's framework differs from the others.

Frequently asked questions

What are the most common technical accounting interview questions?

The five-step revenue model, principal versus agent, lease accounting for lessees, the IFRS 9 expected credit loss model, impairment under IAS 36, provisions versus contingent liabilities, and deferred tax. Interviewers increasingly add questions on recent changes, such as FRS 102's 2026 lease and revenue amendments and IFRS 18, and on how you applied a standard in your own work.

What is the difference between IFRS 16 and ASC 842?

IFRS 16 has one lessee model: almost all leases go on the balance sheet, with depreciation and interest in the income statement. ASC 842 also puts leases on the balance sheet but keeps two models; operating leases have a straight-line cost shown as a single line. US GAAP also has no low-value asset exemption, while both allow a short-term lease exemption.

What changed in FRS 102 in 2026?

The Periodic Review 2024 amendments apply to periods beginning on or after 1 January 2026. Section 23 now uses a five-step revenue model based on IFRS 15, and lessees recognise a right-of-use asset and lease liability for most leases, with short-term and low-value exemptions. A lessee can use its obtainable borrowing rate as a simplification.

How do I prepare for a technical accounting interview?

Learn the core principle of each main standard in one sentence, then attach a real example of applying it. Check which framework the employer reports under, since a UK subsidiary of a US group may use IFRS, FRS 102 and US GAAP. Practise saying answers aloud, and prepare one two-minute story about a technical judgement you made.