The entity must update this measurement over time as circumstances change and accounts for these changes as a change in accounting estimate under Ind AS 8Accounting Policies, Changes in Accounting Estimates and Errors'. © 2020 ‐ Defmacro Software Pvt. 1,50,000 ( actual cash price is 1,00,000). 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 consideration will then be allocated to multiple POs and revenue recognized when control over those distinct goods or services is transferred. However, an entity would allocate a discount to only some of the performance obligations only if it has observable evidence of the obligations to which the entire discount belongs. The timing of revenue recognition might change under Ind AS 115’s control-based model. In situations where control over an asset (goods or services) is transferred at a single point in time, an entity recognizes revenue by evaluating when the customer obtains control of the asset. 2,00,000 in March 2004. Ind AS-115 superseded the Ind AS-11 (Construction Contracts) & Ind AS-18 (Revenue). This will require entities to maintain two accounting records in the year of adoption�one as per Ind AS 115 and the other as per Ind AS 11 and/or 18 to comply with the disclosure requirement. 3. It gives clear steps to recognise such revenue – A. Decidewhetheroutcome of a transaction can be estimated reliably. Ind AS 115 is applicable from 1 April 2018, i.e., FY 2018–19. Ind AS 115 requires retrospective application. and Indian GAAP as they exist today, and to the timing and scope of accounting changes that the standard setting agendas of the International Accounting Standards Board (IASB), the Financial Accounting Standards Board (FASB) and Institute of Chartered Accountants of India (ICAI) (collectively, the Boards) will bring. An entity determines at contract inception whether each performance obligation will be satisfied (that is, control will be transferred) over time or at a specific point in time. If the amount of consideration from a customer contract is variable, an entity is required to evaluate whether the cumulative amount of revenue recognized should be constrained. iii) Financial Instruments and other contractual rights (Ind AS-109, 28)
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. However, this does not imply that entities can ignore past revenue contracts. Under Indian Accounting Standards (Ind AS), accounting for revenue and customer loyalty programmes would be governed by Ind AS 115, Revenue from Contracts with Customers1.Ind AS 115 provides a five-step model for revenue recognition, and also provides specific guidance for options provided to customers to purchase additional goods and services. i) Transfer of Legal Title
Ind AS 21 The Effects of Changes in Foreign Exchange Rates: 23. Performance Obligation is generally specified in contract, but could also include promises implied by entity's customary business practices, published policies or specific statement that create a valid customer expectation. iv) Customer's acceptance
There is no concept of fair valuation in AS 9. If the remaining goods or services are not distinct and are part of a single performance obligation that is partially satisfied, entity should adjust both transaction price and measure of progress towards completion. This may impact entities having significant advance or deferred collection arrangements e.g. Following disclosures are required under Ind AS 115: i) Revenue recognized from contracts with customers, separately from its other sources of revenue, ii) Impairment losses on receivables or contract assets, iii) Categories that depict the nature, amount, timing, and uncertainty of revenue and cash flows, iv) Sufficient information to enable users of financial statements to understand the relationship with revenue information disclosed for reportable segments under Ind AS 108Operating Segments', v) Opening and closing balances of contract assets, contract liabilities, and receivables (if not separately presented), vi) Revenue recognized in the period that was included in contract liabilities at the beginning of the period and revenue from performance obligations (wholly or partly) satisfied in prior periods, vii) Explanation of relationship between timing of satisfying performance obligations and payment, viii) Explanation of significant changes in the balances of contract assets and liabilities, ix) When the entity typically satisfies performance obligations, xii) Obligations for returns, refunds and similar obligations, xiii) Types of warranties and related obligations, xiv) Aggregate amount of transaction price allocated to remaining performance obligations at end of period*, xv) Judgments impacting the expected timing of satisfying performance obligations, xvi) Methods used to recognize revenue for performance satisfied over time, and explanation, xvii) The transaction price and amounts allocated to performance obligations (e.g. Benefits will flow to the entire contract or only to a specific part here from and... & business to manage returns & invoices in an easy manner ) is made easy with ClearTax GST helps. 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