Thus, revenue recognition emphasizes on the timing of recognition of revenue in the statement of profit and loss of an enterprise. The notification of Ind AS 11 and 18 by the MCA provides clarity on the revenue recognition provisions that will apply to companies that are transitioning to Ind AS in 2016-17. Revenue Recognition Ind AS - 18.pptx - International Accounting Standard(IAS-18 Ind AS \u2013 18(Old AS \u2013 9 Revenue Recognition Objective of IAS 18 \u2022. other things, the amendment inserts a new revenue recognition standard Ind AS 115, Revenue from Contracts with Customers (‘Ind AS 115’). As per IAS 18, a transaction is not regarded as generating revenue if goods or services are exchanged for goods or services of a similar nature and value. Ind AS 18 Revenue: 20. Ind AS 18 Revenue Recognition 1. and issued Ind AS 11 (construction contract) and Ind AS 18 (revenue recognition). IND AS 18 – Revenue Recognition Example • A sells a machine with a two year maintenance service for INR 1,000,000 to a customer. This videos compares AS 9 - "Revenue Recognition" with Ind AS 18 "Revenue". For recognition of revenue in case of rendering of services, Ind AS 18 requires recognition of revenue using a percentage of completion method only. Indian Accounting Standard (Ind AS) 18 Revenue (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Step: 2 Identify the performance obligations in the contract. Pages 39. Revenue does not necessarily mean cash received. REVENUE RECOGNITION “Income” is defined in Conceptual Framework Income is increase in economic benefits during the accounting period in the form of inflows or enhancements of assets or decrease in liabilities that results in increase in equity, other than Paragraphs in bold type indicate the main principles.) Indian Accounting Standard (Ind AS) 18 Revenue# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. IAS 18 states that the recognition criteria depends on each type of revenue. Reporting criteria is decided on whether revenue is received from goods, services, interest, royalties or dividends. Revenue recognition is an accounting principle that outlines the specific conditions under which revenue Sales Revenue Sales revenue is the income received by a company from its sales of goods or the provision of services. REVENUE RECOGNITION 3. The new standard also modifies other Ind AS for e.g. Ind AS 21 The Effects of Changes in Foreign Exchange Rates: 23. IFRS 15 implements a uniform method in recognizing all types of revenue. Difference Between AS 9 and Ind AS 18 - Revenue Recognition; Difference Between AS 10 and Ind AS 16: All you need to know about; Difference Between AS 11 and Ind AS 21: Foreign Exchange Rates; About AglaTax. Under Ind AS 18, a contract for the sale of goods normally gives rise to revenue recognition at the time of delivery. Ind AS 17 Leases: 19. Some revenue recognition rules were altered when the transition from Indian GAAP to Ind AS revenue standards (Ind AS 18/11) happened in April 2016. These standards are required to be adopted by the IFRS and US GAAP reporters from 1 January 2018. Ind AS 18 REVENUE RECOGNITION CA POOJA GUPTA 2. These changes continue to be … The request questioned whether there is a need for more general interpretative guidance in this area. as 18 D1. Reporting Criteria: Reporting criteria will be recognized based on the contract and performance obligation. Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance: 22. AS-9 includes revenue as per completed service method or percentage completion method but IND AS-18 recognizes revenue as per percentage of completion method. IFRS 15 is the New Revenue standard issued by IASB to replace the IAS 18 and IAS 11. Under Ind AS 18, when an arrangement includes more than one element, it is necessary to account for the revenue attributable to each component separately. The Companies (Indian Accounting Standards) Amendment Rules, 2018 issued by the Ministry of Corporate Affairs notified Ind AS 115, Revenue from Contracts with Customers and omitted Ind AS 11, Construction Contracts and Ind AS 18, Revenue. ☞ AS 9, Revenue Recognition, ... can refer to IAS 18 which deals with Revenue. The entity recognise revenue in an amount that reflects a consideration ..to which the entity entitled for transfer of goods and/or services at that time. Revenue recognition under IND-AS & IFRS – Comparative overview- Article discusses Applicability of IFRS-15 and IAS-115 and further discusses the following-Revenue recognition steps- 5 steps model. Trade and cash discounts; 2. 5. Consider the following example - A sells an equipment with a two year maintenance service for Rs.10,00,000 to a customer. Ind AS 19 Employee Benefits: 21. Ind AS 115 replaces existing revenue 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. Ind AS 16 Property, Plant and Equipment: 18. There is no concept of fair valuation in AS 9. The new standard also replaces guidance notes on real estate revenue recognition. April 2018 i.e. Ind AS 24 Related Party Disclosures: 25. AglaTax is an free finance platform for educating Professional, Investors, Taxpayers and Students. • The Ministry of Corporate Affairs (MCA) has notified the new revenue recognition standard – Ind-AS 115 which replaces existing Ind-AS 11 (Construction contract) and Ind-AS 18 (Revenue recognition) • Ind-AS 115 is applicable from 1. st . This Video Explains the Main Difference in AS and Ind AS. Indian Accounting Standard (Ind AS) 18 Revenue, prescribes principles for recognition and measurement of revenue. IFRS 15 provides the 5 step framework on how and when to recognize the sale. Companies based in India will need to adopt a more detailed process for revenue recognition as the Ind AS 115 removes scope for interpretation in several areas. ‘Revenue’ may more easily be understood to mean income arising from ordinary activities of an entity. Ind AS 115 is applicable from 1 April 2018, i.e., FY 2018–19. 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. Under AS regime, AS 9, Revenue Recognition states that the amount of revenue shall be measured at the gross inflow of cash, receivables or other considerations received. The Ministry of Corporate Affairs (MCA) has notified Ind AS 115, 'Revenue from Contracts with Customers', on 28 March 2018, which is effective for accounting periods beginning on or after 1 April 2018. Thus, income comprises both revenue and gains. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. After more than a decade of work, the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) had published their largely converged standards on revenue recognition in May, 2014. Decision not to add. Paragraphs in bold type indicate the main principles.) It prescribes only one underlying principle for revenue recognition, which is the transfer of control over goods or services. (FASB) issued their long-awaited converged standard on revenue recognition. Revenue recognition in the power sector is primarily dependent on the terms and conditions enlisted in the power purchase agreement. Step: 3 Determine the transaction price The treatment and effect on revenue of the following incentives are discussed here from AS and Ind AS perspective: 1. Ind AS 18 specifically provides guidance regarding revenue recognition in case the entity is under any obligation to provide free or discounted goods or services or award credits to its customers due to any customer loyalty program. This is the best notes on accounting standard 9 revenue recognition with examples. material on Ind AS 18, Revenue Background In accounting parlance, revenue is considered as a subset of income. IND AS 18 Recognition of revenue from interest Indian GAAP AS 9 requires the recognition from interest on time proportion basis as per contractual terms Ind-AS • IND AS 18 requires interest to be recognised using the effective interest method as set out in Ind AS 109. Currently, revenue recognition in this sector is accounted for as per AS 9. The IFRIC received a request for an interpretation of how IAS 18 Revenue paragraph 8 should be applied to situations in which an entity employs another entity to meet the requirements of a customer under a sales contract. The Indian Accounting Standards (Ind AS), as notified under section 133 of the Companies Act 2013, have been formulated keeping the Indian economic & legal environment in view and with a view to converge with IFRS Standards, as issued by and copyright of which is held by the IFRS Foundation. Construction Contracts and Ind AS 18, Revenue. 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