NOT IN SCOPE

Standard does not deal with revenue arising from

1. Lease Agreements (tnd AS 17)
2. Construction Contracts (ind AS 11)
3. Dividends from investments accounted under equity method (tnd AS 28)
4. Insurance Contracts within scope of Ind AS 104
5. Changes in fair value and disposal of
1. Financial ASsets / Financial Liabilities (Ind AS 39)
2. Other current assets
3. Biological assets related to agricultural activity (ind AS 41)
4. Agricultural product (Ind AS 41)
6. Extraction of Mineral ores
 REVENUE -MEANING
The grossinfiow of economic benefits during the period arising in the course of
ordinary activities of an entity when these inflows results in increasein equity
other than increases relating to contribution from equity participants Scenario
Purchosoa $100
This standard shall be applied in accounting for revenue arising from Sala S120
Profit $20
Sales ofgoods,
Rendering of services, nflows from cther than
Ordinary
Activities are coled Goins
interest, royalties, and dividends tecomeBevenueGains
 TIMING

When to recognise Revenue?

i t is probable that future economic

benefitswill flow to the entity, and
the amount of revenue can be measured reliably

Third party opprovals

gGovt. sign off
Dependency en ether fedors
g.100% of cost incurred
 MEASUREMENT $$ ?
Measured at the fair value of the consideration received or receivable.
oil oil
Exchange of Goods Ol Guns
An exchange for
goods or services of a similar nature is NOT revenue
An exchanges for dissimilar items is
revenue.

Time value of Money:

Discounting is appropriate if inflow of cash or cash equivalents is deferred.
Eg. If the seller is providing interest-free credit to the
buyer or is charging a below
market rate of interest. Interest must be imputed based on market rates.
Prevailing rote for similoar instrument of an lsuer with a similer credit reting
RR (Nominal amcunt of anntrunent to Cesh Seles pries)
 IDENTIFICATION OF TRANSACTION

transaction.
Recognition criteria applied separately for each
Case I: To separately identifiable components of a singte transaction

Sele Includes sale + post sole

service (eg, Car or two wheeler
sefe)

Case 2:
Recognition criteria
bring substance over form
is applied
for two or more transactions together to

Repo Agreements or
Sele and Lease beck trensadions
 SALE OF G0ODS GUIDANCE

Recognised when all of the following criteria have been satisfied:

1. it is probable that the economic benefits associated with the transaction will
flow to the seller, and
2. the amount of reveue can be measured reliably

3. the costs incurred or to be incurred in respect of the transaction can be

measured reliably

4. the seler has transferred to the buyer the significant isksandrewards of

ownership
5. the seler retains neither continuing managerial invovement to the degree
usually associated with ownership nor effective control over the goods sold
 RENDERING OF SERVICES GUIDANCE

Revenue should be recognised by reference to the stage of completion of the

transaction at the balance sheet date (the percentage-of completion method):

Recognised when all of the following criteria are met,
1. it is probable that the economic benefits will flow to the seller,
and

2. the amcunt of revenue can be measured reliably,

3. the costs incurred, and to be incurred, in respect of the transaction can be

measured reliably.

4. the stage of completion at the balance sheet date can be measured reliably;
criteria 4 is not met, revenue recognised onty tothe extent of the expenses
recognised that are recoverable (a "cost-recovery approach).
 USE BY OTHERS OF ENTITY'S ASSETS
Could result in interest, royatty or dividends
Interest: using the effective interest method as set out in Ind AS 39

Royalties: on an accruals basis in accordance with the substance of the relevant

agreement

Dividends: when the shareholder's right to receive payment is established

 DISCLOSURE

Accounting policy for recognising revenue

Amount of each of the following types of revenue:

sale of goods
rendering of services
.interest
royalties
Dividends

each the above categories, the amount of revenue from exchanges of

Within of
8cods or services