Professional Documents
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Revenue is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of an enterprise
Revenue should be recognized in the financial statement when . . . It is earned It is realized or realizable (Measurable)
Chapter 18-2
Sales of Goods
Rendering of services
Chapter 18-3
Sale of Goods
Ownership of good transferred for a price
All significant risks and rewards have been transferred and no effective control is retained
Certainty exists regarding amount of consideration
2. Recognise Revenue
Rendering of Services
Service is recognised either on CSM or PCM. a.) Completed service method (CSM) i. Rendering of services is fully or substantially completed. ii. More than one act is involved, revenue to be recognised on execution of all those acts.
b. ) Proportionate completion method (PCM) Recognise revenue proportionately with the degree of completion of services. Only when certainty exists regarding amount of consideration and collection
Chapter 18-5
Interest: On the time basis Royalty : On accrual basis. Dividends: Right to receive payment is established.
Chapter 18-6
Not Applicable
Standard doesnt apply to following aspects: