Вы находитесь на странице: 1из 4


IAS 18 Revenue depicts the accounting requirements for when to recognize revenue from the
sale of goods, rendering of services, and for the interest, royalties and dividends. Revenue is
measured at the reasonable estimation of the thought got or receivable and perceived when
recommended conditions are met, which relies on upon the way of the revenue.
The purpose of IAS 18 is to endorse the accounting treatment for revenue emerging from specific
sorts of exchanges and occasions.
Key definition:
Revenue: It includes only the gross inflows of economic benefits received or receivable by the
entity on its own account arising from operating activities of the entity.
Fair Value:
It is the sum for which a benefit could be traded or settlement of an obligation between willing
parties in an arms length transaction.
Measurement of revenue:
Revenue shall be measured at the fair value of the consideration received or receivable. The
amount of revenue arising on a transaction is usually determined by the agreement between the
entity and the buyer of that asset. In most cases, the consideration is in the form of cash or cash
equivalents and the amount of revenue is the amount of cash or cash equivalents received or
receivable. When goods or services are exchanged or swapped for goods or services which are of
similar nature and value, the exchange would not be regarded as a transaction which generates
revenue. The recognition criteria in this standard are usually applied separately depending upon
the nature of the transaction. In certain scenarios, it is essential to apply the recognition criteria to
the separately identifiable components of the transaction to reflect the substance of the

1) Percentage Of Completion Method:

The percentage completion method is generally is used by corporations for long term projects
and not solely in the period when the development has been finished, as in the finished contract
technique. The degree of completion of the development, i.e. the percentage of completion, is
normally assessed by dividing the aggregate development costs brought about to date by the
aggregate estimated expenses of the contract.
2) Completed Contract Method:
The completed contract strategy for bookkeeping is utilized by producers and contractual
workers. Not at all like the percentage of completion strategy, which endeavors to perceive
revenues and gross benefit in the relevant times of development, and not solely in the period
when the development has been finished, under the finished contract technique for bookkeeping,
Revenue, costs, and gross benefit is conceded until the completion of the agreement. On the off
chance that towards the end of the business financial year of an organization and if the agreement
stays incomplete, no revenue, costs, and benefit on that agreement is realize in the present year
on the pay articulation; all expenses and billings are collected in individual asset report accounts.

Recognition of revenue:
Acknowledgment, as characterized in the IASB Structure, implies consolidating a thing that
meets the meaning of revenue (above) in the income statement when it meets the accompanying
1) It is plausible that any future financial benefit is connected with the thing of revenue will
stream to the entity
2) The amount of revenue can be measured with reliability
Following categories of revenue recognition are as follows:

Sale of goods:
Revenue arising from the sale of goods should be recognized when all of the following criteria
have been satisfied:
The seller has exchanged to the purchaser the risks and rewards related to the ownership
The vender holds neither proceeding with administrative inclusion to the degree more often than
not connected with the ownership or viable control over the products sold
The amount of revenue can be measured dependably
It is plausible that the monetary advantages associated with the exchange will stream to the
The costs brought about or to be caused in regard of the exchange can be measured dependably

Rendering of services:
For revenue emerging from the rendering of services, given that the majority of the
accompanying criteria are met, revenue ought to be perceived by reference to the phase of
fulfillment of the exchange at the accounting report date (the percentage completion method):
The amount of revenue can be measured dependably
It is plausible that the monetary advantages will stream to the seller
The phase of consummation at the asset report date can be measured dependably
The costs acquired, or to be brought about, in regard of the exchange can be measured
It is important to consider when reporting and analyzing revenue when the above criteria are not
met, revenue arising from the rendering of services should be recognized only to the extent of the
expenses recognized that are recoverable (a "cost-recovery approach").

Interest, royalties, and dividends:

For interest, royalties and dividends, given that it is likely that the monetary advantages will
stream to the undertaking and the amount of revenue can be measured dependably, income ought
to be perceived as takes after:

interest: using the effective interest method

royalties: on a gatherings premise as per the substance of the pertinent agreement

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

Other Revenue:
In other words other revenue is revenue from non- core operations of a firm. For instance, a
firm that manufactures and offers vehicles would record the revenue from the sale of a car as
"standard" revenue. On the off chance that that same organization additionally leased a bit of
one of its structures, it would record that revenue as "other Revenue" and uncover it
independently on its income statement to demonstrate that it is from an option that is other
than its core operations.

accounting policy for recognizing revenue

amount of each of the following types of revenue:

o sale of goods
o rendering of services
o interest
o royalties