IFRS 15 provides the 5 step framework on how and when to recognize the sale. It prescribes only one underlying principle for revenue recognition, which is the transfer of control over goods or services. 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. 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. 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. 5. Decision not to add. 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. Currently, revenue recognition in this sector is accounted for as per AS 9. Paragraphs in bold type indicate the main principles.) IFRS 15 is the New Revenue standard issued by IASB to replace the IAS 18 and IAS 11. IAS 18 states that the recognition criteria depends on each type of revenue. 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. 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 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. material on Ind AS 18, Revenue Background In accounting parlance, revenue is considered as a subset of income. Thus, revenue recognition emphasizes on the timing of recognition of revenue in the statement of profit and loss of an enterprise. April 2018 i.e. This is the best notes on accounting standard 9 revenue recognition with examples. Thus, income comprises both revenue and gains. Step: 3 Determine the transaction price Ind AS 24 Related Party Disclosures: 25. Construction Contracts and Ind AS 18, Revenue. (FASB) issued their long-awaited converged standard on revenue recognition. 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. 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. Ind AS 17 Leases: 19. The treatment and effect on revenue of the following incentives are discussed here from AS and Ind AS perspective: 1. These changes continue to be … IND AS 18 – Revenue Recognition Multiple element arrangements (Ex) CA Sandesh Mundra www.consolidationofaccounts.com 45. The request questioned whether there is a need for more general interpretative guidance in this area. Ind AS 115 is applicable from 1 April 2018, i.e., FY 2018–19. This videos compares AS 9 - "Revenue Recognition" with Ind AS 18 "Revenue". and issued Ind AS 11 (construction contract) and Ind AS 18 (revenue recognition). The major difference in IFRS 15 is the revenue recognition pattern. other things, the amendment inserts a new revenue recognition standard Ind AS 115, Revenue from Contracts with Customers (‘Ind AS 115’). Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance: 22. 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. 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. Revenue Recognition Ind AS - 18.pptx - International... School Indian Institute of Management Raipur; Course Title AC MISC; Uploaded By rajista101. This preview shows page 1 - 12 out of 39 pages. 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. The new standard also replaces guidance notes on real estate 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. 3 Ind AS 18 and 11_Revenue Recognition.pdf - Revenue Recognition October 2016 KPMG.com\/in What wil you learn After this module you would be able to D1. ‘Revenue’ may more easily be understood to mean income arising from ordinary activities of an entity. Ind AS 19 Employee Benefits: 21. September 2007 Reason. Step: 1 Identify the contract(s) with a customer. Step: 2 Identify the performance obligations in the contract. Indian Accounting Standard (Ind AS) 18 Revenue (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. 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. Reporting criteria is decided on whether revenue is received from goods, services, interest, royalties or dividends. REVENUE RECOGNITION 3. For recognition of revenue in case of rendering of services, Ind AS 18 requires recognition of revenue using a percentage of completion method only. Paragraphs in bold type indicate the main principles.) 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. Ind AS 18 REVENUE RECOGNITION CA POOJA GUPTA 2. Ind AS 18 Revenue Recognition 1. Indian Accounting Standard (Ind AS) 18 Revenue# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. 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. The new standard also modifies other Ind AS for e.g. Under Ind AS 18, a contract for the sale of goods normally gives rise to revenue recognition at the time of delivery. Under Ind AS 18, revenue would likely be recognized when the product is received by the customer because the risks and rewards of ownership have not been substantively transferred to the customer at the point of shipment. Ind AS 18 Revenue: 20. IFRS 15 implements a uniform method in recognizing all types of revenue. Revenue recognition in the power sector is primarily dependent on the terms and conditions enlisted in the power purchase agreement. 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. Ind AS 21 The Effects of Changes in Foreign Exchange Rates: 23. 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. There is no concept of fair valuation in AS 9. This Video Explains the Main Difference in AS and Ind AS. ☞ AS 9, Revenue Recognition, ... can refer to IAS 18 which deals with Revenue. Pages 39. Trade and cash discounts; 2. Ind AS 23 Borrowing Costs: 24. These standards are required to be adopted by the IFRS and US GAAP reporters from 1 January 2018. 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. Consider the following example - A sells an equipment with a two year maintenance service for Rs.10,00,000 to a customer. Revenue does not necessarily mean cash received. 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. Reporting Criteria: Reporting criteria will be recognized based on the contract and performance obligation. as 18 D1. 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 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. Indian Accounting Standard (Ind AS) 18 Revenue, prescribes principles for recognition and measurement of revenue. Ind AS 16 Property, Plant and Equipment: 18. 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. AglaTax is an free finance platform for educating Professional, Investors, Taxpayers and Students. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. • 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 . To IAS 18 states that the recognition criteria depends on each type of revenue perspective: 1 Professional Investors. Year maintenance service for Rs.10,00,000 to a customer percentage completion method but Ind AS-18 revenue. 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