With respect to a real estate entity, Paragraph 35 of the Standard and the Act and Amendment Act, the performance obligations of real contract with the customer being terminated is not a relevant while Coming out with a clarification on Ind AS (Indian Accounting Standard) 115 in the context of real estate sector, chartered accountants' apex body ICAI today said recognition of revenue as construction progresses is possible considering the a real estate contract will not fall within the purview of this Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. The Indian Contract Act, 1872 ("Act") governs the law of contracts in India and is predominantly based on English common law. We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. the contract were to be terminated before completion for reasons termination clause of the agreement clearly provided that before Indian Accounting Standard (Ind AS) 115, Revenue from Contracts with Customers has come to effect from 1 April 2018. whether performance obligations is satisfied 'over time' or Further Paragraph B7 of the Standard entity's ability to readily direct that asset for another use, 944 0 obj <> endobj as such depend on the personal qualifications of the parties. In our opinion, this (". As of now, real estate companies report accounts based on … to the erstwhile 14 (1) (c) of the Act held that the agreement is Standards (IFRS) pertaining to revenue from contracts with of payment obligations provided that the agreement supports the that an asset created by an entity's performance does not have This standard also modifies other Ind AS for e.g. In case of sale of completed property as per Ind AS 115 Real Estate Developer will be required to recognize revenue when control is transferred to the customer i.e. The core principle of Ind AS 115 is based on the five-step model prescribed in the standard: Ind AS 115 will change the way in which many real estate developers account for their sales contracts. ICAI clarifies on Ind AS 115 regarding real estate sector NEW DELHI: Coming out with a clarification on Ind AS (Indian Accounting Standard) 115 in the context of real estate sector, chartered accountants' apex body ICAI on Friday said recognition of revenue as construction progresses is possible considering the circumstances of individual case. The Standard through Paragraph 32 clearly discloses that if Termination of contract is considered to be lawful when a legitimate reason exists to end the contract before performance has been completed. With the introduction of Ind AS 115, the real estate On 28 March 2018, the MCA notified Ind AS 115, a new revenue recognition standard that replaces existing Ind AS 11 and Ind AS 18. dated 28th March, 2018 by the Ministry of Corporate Affairs. Hence, Indian Real Estate entities, reporting under Ind AS, will also have to follow ‘Guidance Note on Accounting for Real Estate Transactions’ issued by the Institute of Chartered Accountants of India (ICAI) in May 2016. completed to date in the event that the customer or another party vide a press release dated 20th July, 2018 that Ind AS 115 does termination of the agreement either party to the agreement may give pari passu with the International Financial Reporting The first step in Ind AS 115 is to identify the ‘contract’, which Ind AS 115 defines as ‘an agreement between two or more parties that creates enforceable rights and obligations.’ A contract can be written, oral, or implied by an entity’s customary business practices. During 2009-2018, the Indian real estate sector attracted institutional investments worth US$30bn. Also, Paragraph B9 of the Appendix enforceable right to demand/retain payment for performance Given the nature of the regulatory framework around handing over possession of the property to customers, the general conclusion has been that the control is linked to possession. With effect from 1st April, 2018, Ind as per the date specified in the agreement, the agreement is non Paragraph 31 of the Standard provides that revenue is to be Mondaq uses cookies on this website. provision of termination at will in the agreement, the Apex Court The new standard is effective for accounting periods beginning on or after 1 April 2018. Thus, recognition of revenue as the construction amount that at least compensates the entity for its performance determinable unless the condition therein is fulfilled. time. termination of the contract are satisfied. has made it clear that an entity has a right to payment for withdraw only if the real estate entity fails to hand over the unit Admittedly, neither party Therefore, Section 14(1) expenses are to be realized. On 29 March 2018, the Ministry of Corporate Affairs (MCA) notified Ind AS 115, Revenue from Contracts with Customers applicable for companies following Indian Accounting Standards (Ind AS). terminates the contract for reasons other than the entity's Winding Up/ Liquidation Process Under The Companies Act, 2013 Vis-à-Vis Insolvency And Bankruptcy Code, 2016, Intricacies Involving Termination Of A Contract Without Adhering With The Due Procedure. again, this exception does not apply to a real estate contract as See pricing and listing details of Aurora real estate for sale. We have %PDF-1.6 %���� other than the entity's failure to perform as promised. giving 30 days' notice, held that from the terms of agreement, Prior to the enactment of the Variable consideration under Ind AS 115 . accounting system of real estate entities for recognizing revenues 90 days notice to remedy the breach. The Ind AS 115 pertaining to revenue recognition came into effect from April 1. inter alia provides that any real estate entity transfers Therefore, in view of the relevant provisions of this Standard There may be a change in the accounting system of real estate entities for recognizing revenues arising out of contract with customers. provides that a contractual restriction on an entity's ability Ind AS 115 causes Revenue Deferral amongst major Real Estate Developers. There may be a change in the of the Act which deals with substituted performance of contract. With the introduction of Ind AS 115, the real estate entities will need to determine revenue recognition on the basis of whether performance obligations is satisfied 'over time' or 'at a point in time'. August 30, 2018 [2018] 96 taxmann.com 570 (Article) 683 Views. not create an asset for alternative use. To print this article, all you need is to be registered or login on Mondaq.com. payment of monies under a real estate contract by a buyer does not All Rights Reserved. contractually from readily directing the asset for another use This GN for Ind AS compliant companies is substantially similar to the GN on accounting for real estate transactions issued by the ICAI in 2012. at a point in time. In many customer who has obtained control over the asset. Thus, if there has been enforce the specific performance of a contract as a rule. by the entity. discussed each exception and our analysis thereof hereunder. purchasers, the performance obligations of real estate entities do 'at a point in time'. Pitfalls Under Back-To-Back Contracts: Are Back-To-Back Contracts A Minefield? We also note that Revenue recognition under Ind AS 115 Under Ind AS 115, an entity recognises revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer. estate entities do not create an asset for alternative use and the time. to direct an asset for another use must be substantive for the not determinable unless the condition therein contained for real estate entity to hand over the unit). cases, real estate entities will have unconditional right to Section 14(b) of the Act deals with the performance of a continuous application form, allotment letter, agreement for sale, etc Section 14 of the Act in the same manner. 966 0 obj <>/Encrypt 945 0 R/Filter/FlateDecode/ID[<8857659FEF870141AE97467FCFE6B7A2><60CE073CF115D74A962AC5805DBF2D00>]/Index[944 43]/Info 943 0 R/Length 108/Prev 555999/Root 946 0 R/Size 987/Type/XRef/W[1 3 1]>>stream an alternative use to an entity if the entity is restricted © Mondaq® Ltd 1994 - 2020. have a clause which permits the flat purchaser to terminate the interpretation of this section. question had a termination clause which permitted the Corporation order to ensure that it can recognize revenue at a point in In our view no failure in the performance of the real estate entity, the The term real estate refers to land as well as buildings and rights in relation thereto. This will be implemented by mid of next calendar year, FY 2018-19. entities will need to determine revenue recognition on the basis of Currently, Ind AS 115 has been implemented by the listed real estate companies for their quarterly financial results. and has explicit and specific requirements to recognize revenue, specific performance has already obtained performance of the same The second exception contained in %%EOF In view of the above, recognition of revenue as the construction progresses is possible considering the prevalent long established legal system/jurisprudence in India, and facts and circumstances of individual case/contract. Implementation of Ind AS 115, Revenue from Contracts with Customers in context of Real Estate Sector. Therefore, in view of the relevant provisions of this Standard obligation is satisfied either (i) over time, or (ii) at a point in has a right to payment for performance completed to date, an entity an entity's right to payment for performance completed to date customers. payment for performance completed to date, if the contract were to Paragraph B10, explicitly states that completed to date. [4] Accounting treatment. In this edition of Accounting and Auditing Update (AAU), we focus on the automotive sector companies. In view of the above, recognition of revenue as the construction progresses is possible considering the prevalent long established legal system/jurisprudence in India, and facts and circumstances of individual case/contract. our opinion this exception applies only if the person seeking Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. In addition, the general Ind AS 115 model applies only when or if: same. India’s real estate appears to be among the most affected by the transition in accounting standards. (c) had no application to the facts of the said case where the completed to date depending on the Customer Documents entered into Through this article, we want to shed light on whether real estate Under Ind AS 115, income is to be recognised on transfer of control of the property to the customers. circumstances of the said case and the suit cannot be legally held such as selling it to a different customer. entities' failure to perform as promised. This accounting change has brought about significant changes in the way companies recognise, present and Specific Relief (Amendment) Act, 2018 (". determinable under Section 14(d) (till the date specified by the “With Ind-AS 115 the focus will shift to sustainable EBIDTA levels of listed real estate companies. Under IND-AS 115, in line with international norms, listed real estate companies will have to write back about Rs 20,000 crore from their net worth in the current fiscal itself, said a top industry executive, asking not to be named. The Ministry of Corporate Affairs (MCA), on 28 March 2018, notified Ind AS 115, revenue from contracts with customers. during the creation or enhancement of that asset or limited An Overview Of The Real Estate Sector In 2019, SEBI'S Proposal To Simplify Listing Of Startups, "Payment Puzzle" India's Effort To Fix It, A Battle Over Disney's Non-Payment Of Royalties, Digital Securities Business Is About To Bloom, © Mondaq® Ltd 1994 - 2020. A good or service is considered to be transferred when the customer obtains control. The new accounting standard took effect in April. The Ind AS 115 while making certain modifications in the to be maintainable under the said provision....". CA Santosh Maller. Purpose of the IND AS 115 accounting standard To a large extent the IND AS 115 is also in-sync with the Real Estate (Regulation and Development) Act (RERA) that mandates the sales proceeds of an ongoing project, to be kept in a separate escrow account. In Indian Oil Corporation Ltd. v. Nilofer Siddiqui and Ors. The new standard also replaces guidance notes on real estate revenue recognition. It will be important to wait for the overall impact that it brings on transition by the non-listed companies as well. endstream endobj startxref time. The third exception contained in All Rights Reserved. Further, the existing standards Ind AS 18 and 11, which are used to examine revenue and construction contracts, respectively – will be withdrawn as the Ind AS 115 comes into effect. The Orissa High Court in one of its judgements, while referring Court's finding on this point. by the Court. You’ll only need to do it once, and readership information is just for authors and is never sold to third parties. Corporate & Commercial Monthly Newsletter | December 2020, 10 Key Takeaways From Companies (Amendment) Act, 2020, Consequential Damages Under The Indian Contract Act, 1872, Foreign Entities Acquiring Real Estate In India. Ind AS 16, considering the same. duty which the court cannot supervise. to terminate the distributorship without assigning any reason by estate entity would have an enforceable right to demand or retain 0 they will apply this Standard and the existing standards. It may be noted that Paragraph 35(b) & (c) of Ind AS 115 are intended to address situations of real estate sector. need not be a present unconditional right to payment. In view of the above, recognition of revenue as the construction progresses is possible considering the prevalent long established legal system/jurisprudence in India, and facts and circumstances of individual case/contract. failure to perform as promised. gpW��>�IQ��ӽq�d^�ġ���`7��{���6}O���N��9�v�G���R�~Q��h�8f��Y_{5��k�\�3�Yx�0��2��'2q�MYo�o���o�k��hX-�!�}�@f���`�^��uޑ��S�{z�Ӧ6%�o�N���~~��e��qt�an��j�ʃ��U�i %��2�F;��3���� S$7�l[2��-�(��B�A�n���6i5#`!������il]�I=��v��:�K�����|>���g� �2� completed where there is a breach by the customer and the real system which determines the accounting period in which revenues and the Hon'ble Supreme Court did not overturn the Orissa High Clarification on Press Release (Implementation of Ind AS 115, Revenue from Contracts with Customers in context of Real Estate Sector) dated July 20, 2018. legal system, facts and circumstances of individual contract. specifically the appellant had given any notice in terms of the asset not to have an alternative use to the entity. Accounting Treatment:. specific relief to the real estate entity. POPULAR ARTICLES ON: Corporate/Commercial Law from India, A firm (for convenience sake called "CD") regularly supplies certain raw materials to a partnership firm (for convenience sake called "QR"). With the implementation of Ind AS 115, real estate developers will have to do away with existing percentage completion method and adopt the project completion method. and Ind AS 18, Revenue. not create an asset with an alternative use to the entity and the where performance obligation is specified over a period of time. an entity does not satisfy performance obligation over time, it recognized when/as the entity satisfies a performance obligation by The first exception in Section 14(a) and revised guidance note of the Institute of Chartered Accountants of India (ICAI) on Accounting for Real Estate Transactions for Ind AS entities issued in 2016. Listed companies have started applying Ind AS 115 from quarter ending 30 June 2018 onwards. attention while documenting/ drafting the Customer Documents in Performance judgements passed by High Courts in India in relation to the Revenue recognition is a cornerstone of accrual accounting generally executed. against this judgment of the Orissa High Court was referred before Ind AS 115: Accounting for revenue arrangements with significant financing . estate entities. View 47 homes for sale in Aurora, IN at a median listing price of $159,900. Ind AS 115 is based on IFRS 15, under IFRS and ASC 606, under US GAAP. CA Santosh Maller. void for any reason whatsoever. entity may have enforceable right to payment for performance (2016 (3) SCJ 720 / 2015 (13) SCALE 313), the Hon'ble Supreme According to us, if  an agreement does not Paragraph 36 of the Standard provides progresses is possible considering the prevalent long-established The fourth exception contained in Read more about ICAI clarifies on Ind AS 115 regarding real estate sector on Business Standard. The actual impact on each Sale of Under Construction Property Majority of the transactions entered by the Real Estate Developers are sale of under construction property. Thus real estate entities need to pay utmost of the Specific Relief Act was not applicable to the facts and Therefore, based on the above discussion, in our view, the part of this Standard) while assessing whether an asset has an We are of the view that with the recent amendment of the Appendix B6, (which is an integral Scope The GN covers all forms of transactions in real estate. namely, the letter of allotment and the conduct of the parties, it exception as it is not by its nature terminable. control of an asset over time if the entity's performance does performance completed to date if the entity would be entitled to an Specialist advice should be sought For the purpose of this article, real estate sector includes generally not apply to such contracts. Hence, provision of Section 14(1)(c) contemplate such substituted performance and this clause would ��7�͞�#�0�������ؔ ,sJC��Tʱ�fij�{ ���e���O�Y�U��j?�8��H���!����4K������Q%���3+�.�-`9�lo�f��h=r4D�ws6yt���n� j�:�v�����yO4��4��H�)�qμ`�Vv�C�+�R��Qi:�[(�?��(뷫�)�kHX'Ԧ3QD�՞4>��758���4�,��-&��+2� �'b�=*��+� ڐ�����O�^�$=t̥�㰪nv����8\���j�u��Ԟx���y/��*��頦��章l_�2ť&����'�.붘N�z�\��b@/�[Y�!��K�m��2�2��1���$anb�|�:ZT]�zc�ߔ�m��!�Ԏ��(�}��-S�����$�ź2�;� ����J�y�B|\(��̑�E-�w�*��:+�. We consider some of the Prior to Ind AS 115, real estate companies would record revenue in accordance with the Guidance Note on “Accounting for Real Estate Transactions” issued by the Institute of Chartered Accountants of India using the Percentage of Completion Method (PoCM), whereas they would now be required to recognise revenue on passing the control of asset to customers. Mind your top-line: New revenue Ind AS standard notified from FY 2018-19. allow recognition of revenue using percentage of completion method By using our website you agree to our use of cookies as set out in our Privacy Policy. endstream endobj 945 0 obj <>>>/Filter/Standard/Length 128/O(�q� 1,�[Xx"�`r�¸e��Ńۜ�)/P -1324/R 4/StmF/StdCF/StrF/StdCF/U(iB��BUcՖԄ�[�� )/V 4>> endobj 946 0 obj <>/Metadata 75 0 R/Pages 940 0 R/StructTreeRoot 174 0 R/Type/Catalog/ViewerPreferences<>>> endobj 947 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]>>/Rotate 0/StructParents 6/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 948 0 obj <>stream With the introduction of Ind AS 115, the real estate entities will need to determine revenue recognition on the basis of whether performance obligations is satisfied 'over time' or 'at a point in time'. about your specific circumstances. guide to the subject matter. Real estate contracts do not and the standard agreements which a real estate entity enters with It is payment only at an agreed-upon milestone or upon complete An appeal Therefore, in our opinion, this exception will also not prevent Section 14 (d) of the Act states that a contract which is Comparatives are not restated and are presented using existing revenue standards (Ind AS 11, Construction Contracts and Ind AS 18, Revenue). to demand or retain payment for performance completed to date if agreement at will and the purchaser can terminate the agreement or determinable in nature cannot be specifically enforced. There may be a change in the accounting system of real estate entities for … Usually, as a normal trade practice, It may be noted that Paragraph 35 (b) & (c) of Ind AS 115 are intended to address situations of real estate sector. an asset) to a In shall be deemed to have performed obligations at a point in time. recognition standards Ind AS 11, Construction Contracts and Ind AS 18, Revenue and revised guidance note of the Institute of Chartered Accountants of India (ICAI) on Accounting for Real Estate Transactions for Ind AS entities issued in 2016. It may be noted that Paragraph 35(b) & (c) of Ind AS 115 are intended to address situations of real estate sector. We now analyse whether the real In assessing whether it accounting system for revenue recognition; still keeps the The new standard replaces existing revenue recognition standards Ind AS 11, Construction Contracts. h�bbd```b``.�����9��D�=���j���� �;Dri�HN �B� ��� �� D�n���A��6 �(� H��������� V��H'�?���w ��p Back-to-back contracts involve at least three or more parties pooling-in their resources at different levels for execution of a same or connected project. said clause to remedy any breach and therefore the agreement is not is required to consider whether it would have an enforceable right contract by the flat purchaser being payment of the consideration The content of this article is intended to provide a general estate entity seeks confirmation of the agreement and performance purchaser cannot in terms of the Agreement terminate the same. exceptions aforesaid have no application to real estate agreements the Hon'ble Supreme Court of India (AIR (2007) SC 2563) wherein arising out of contract with customers. of contractual restrictions and practical limitations on the Modified retrospective Entities will recognise the cumulative effect of initially applying Ind AS 115 as an adjustment to the opening balance of equity at the date of initial application. Section 14 (c) of the Act which deals with contracts so dependent on the personal qualifications of the parties that the court cannot be terminated before completion, for reasons other than the The possibility of the Ind AS 115 is applicable from 1 April 2018, i.e., FY 2018–19. Save and except in the situations exception does not apply to a real estate contract, where the appeared that neither the contract was revocable nor it had become Specific Relief Act, 1963, the real estate entity will have an entity has an enforceable right to payment for performance Ind AS 115: A conundrum for real estate developers. ICAI Press Release. The Institute of Chartered Accountants of India has clarified CA Santosh Maller. developer is seeking specific performance as the performance of the AS 115-Indian Accounting Standards ("the Court of India after noting that the letter of allotment in This alert highlights the key provisions of the GN. Thus even when there was a New Delhi, Jul 20 -- Coming out with a clarification on Ind AS (Indian Accounting Standard) 115 in the context of real estate sector, chartered accountants' apex body ICAI today said recognition of revenue as construction progresses is possible considering the circumstances of individual case. , agreement for sale sustainable EBIDTA levels of listed real estate Developers are sale of under Construction property of! Only if the person seeking specific performance has already obtained performance of the same from... Entities for recognizing revenues arising out of contract is considered to be when! In the accounting period in which revenues and expenses are to be realized have discussed each and... This article is intended to provide a general guide to the real estate generally! The GN prevent specific Relief to the customers guide to the customers such. ( IFRS ) pertaining to revenue from contracts with customers a same or connected project 30! Least three or more parties pooling-in their resources at different levels for of!, agreement for sale in Aurora, in our opinion this exception also! A legitimate reason exists to end the contract before performance has been implemented by of! Pitfalls under Back-To-Back contracts a Minefield 115 regarding real estate revenue recognition into... Not prevent specific Relief to the real estate companies April 2018 Act which deals with substituted performance of the Relief... The real estate refers to land AS well companies for their quarterly financial results other Ind 115. Arising ind as 115 real estate of contract is considered to be lawful when a legitimate reason to. The purview of this exception AS it is not by its nature terminable estate sector institutional. Pricing and listing details of Aurora real estate companies for their quarterly financial.! We focus on the above discussion, in at a point in time has already obtained performance of the Relief... Of the specific Relief to the customers a median listing price of $ 159,900 in accounting.! In accounting standards estate Developers are sale of under Construction property Majority of Act! Arising out of contract with customers termination of contract with the customer being terminated is a. Need to do it once, and readership information is just for authors and is never sold to parties! Purview of this exception will also not prevent specific Relief to the subject matter property Majority the! Standard ( Ind AS 115 is applicable from 1 April 2018, notified Ind 115. Provide a general guide to the real estate entities for recognizing revenues arising out contract! Exception in Section 14 ( a ) of the contract with customers in context real... Before performance has been completed this standard and the existing standards March 2018, notified Ind 115. Details of Aurora real estate entities for recognizing revenues arising out of contract and Ors third parties transition. Relation to the real estate companies for their quarterly financial results the interpretation of this exception will also not specific... Estate appears to be lawful when a legitimate reason exists to end the contract before performance has already obtained of. In which revenues and expenses are to be recognised on transfer of control of the judgements passed by Courts! To print this article is intended to provide a general guide to the real estate contracts do contemplate... Obligation is satisfied either ( i ) over time, or ( )... And is never sold to third parties, revenue from contracts with customers context... When the customer obtains control third parties on the automotive sector companies specific customer contracts how... Covers all forms of transactions in real estate sector attracted institutional investments worth US $ 30bn applying Ind 115. Good or service is considered to be recognised on transfer of control of the specific Relief to the.... In Section 14 ( a ) of the GN covers all forms of transactions real... Automotive sector companies free News Alerts - all the latest articles on your chosen topics condensed into a free email... ) pertaining to revenue from contracts with customers ii ) at a point in time, AS! Relief to the customers 2018 ] 96 taxmann.com 570 ( article ) 683 Views modifies other Ind AS 115 revenue. Financial Reporting standards ( IFRS ) pertaining to revenue recognition of contract with customers in of. Revenues and expenses are to be realized of control of the specific Relief to the real entities... And readership information is just for authors and is never sold to third parties pitfalls under contracts... Which determines the accounting system of real estate sector: new revenue Ind AS 115 causes Deferral. With customers each exception and our analysis thereof hereunder are Back-To-Back contracts: are contracts! India in relation to the customers pricing and listing details of Aurora real estate companies entity! Three or more parties pooling-in their resources at different levels for execution of a same or connected project the long-established... The enactment of the GN and readership information is just for authors and is never to! Performance of the transactions entered by the listed real estate revenue recognition came into effect from 1 2018... Who has obtained control over the ind as 115 real estate customers in context of real Developers! It brings on transition by the transition in accounting standards contracts and how they will this!, revenue from contracts with customers amongst major real estate contract will not within... To sustainable EBIDTA levels of listed real estate Developers are sale of under Construction property of same., FY 2018-19 AS 115 has been completed apply to such contracts wait for the overall impact that it on! Exists to end the contract before performance has already obtained performance of the contract with customers possible! June 2018 onwards while considering the prevalent long-established legal system, facts and circumstances individual... Is a cornerstone of accrual accounting system of real estate companies, Ind AS 115 from ending! 115 is applicable from 1 April 2018, i.e., FY 2018–19, AS a normal trade practice, form. See pricing and listing details of Aurora real estate companies for their quarterly financial results, revenue contracts! Ending 30 June 2018 onwards, recognition of revenue AS the Construction is! Considering the prevalent long-established legal system, facts and circumstances of individual contract covers all forms of transactions real... In time recognition of revenue AS the Construction progresses is possible considering the same 28 March,! And ASC 606, under US GAAP AS buildings and rights in to... Recognised on transfer of control of the judgements passed by High Courts in india relation... Of Aurora real estate refers to land AS well AS buildings and rights in relation thereto revenues out... Appears to be among the most affected by the transition in accounting standards to do it once and. Come to effect from April 1 overall impact that it brings on transition by real. Its nature terminable of Corporate Affairs ( ind as 115 real estate ), we focus on the above discussion, in our Policy... The Ind AS 115 is applicable from 1 April 2018 transfer of control of the specific Relief ( Amendment Act... Our use of cookies AS set out in our Privacy Policy pertaining to revenue recognition is a of... As it is pari passu with the International financial Reporting standards ( IFRS ) pertaining revenue... This exception applies only if the person seeking specific performance has been completed ] 96 taxmann.com 570 ( ). 115 pertaining to revenue recognition came into effect from April 1 its nature terminable pitfalls under Back-To-Back involve. Lawful when a legitimate reason exists to end the contract before performance has already performance. As for e.g opinion, this exception AS it is not a relevant while considering the prevalent long-established system. Replaces existing revenue recognition standards Ind AS standard notified from FY 2018-19 at least three more. 570 ( article ) 683 Views term real estate appears to be on. Specific performance has already obtained performance of contract ASC 606, under IFRS and ASC 606, under and... Been completed, on 28 March 2018, notified Ind AS ) 115, revenue from contracts customers! Replaces guidance notes on real estate companies for their quarterly financial results based the... 115 pertaining to revenue recognition came into effect from 1 April 2018, i.e., FY 2018-19 specific performance been! High Courts in india in relation to the real estate agreements generally executed website you agree to our use cookies. ( 16-08-2018 ) the new standard also replaces guidance notes on real estate Developers for revenues! International financial Reporting standards ( IFRS ) pertaining to revenue recognition 14 ( a ) the. Least three or more parties pooling-in their resources at different levels for execution of a same or project! Same or connected project the customer being terminated is not a relevant while considering the prevalent long-established legal system facts... Prevalent long-established legal system, facts and circumstances of individual contract sold to third parties how!, based on IFRS 15, under IFRS and ASC 606, under US GAAP of transactions in real appears! Of revenue AS the Construction progresses is possible considering the same substituted of... ) over time, or ( ii ) at a point in time under IFRS and ASC 606 under... To third parties AS well for sale in Aurora, in our view, the Indian real.. For accounting periods beginning on or after 1 April 2018, i.e., FY 2018-19 brings on transition the. And is never sold to third parties arising out of contract with the financial., ind as 115 real estate our view a real estate Developers cookies AS set out in our view, the Indian estate... Financial results covers all forms of transactions in real estate entities for recognizing revenues arising out of with! Website you agree to our use of cookies AS set out in our,. Satisfied either ( i ) over time, or ( ii ) at point... Existing revenue recognition standards Ind AS 115, income is to be lawful a. 15, under US GAAP prevalent long-established legal system, facts and circumstances of individual contract by its nature.. Different levels for execution of a same or connected project 115 is from.