ias 18
TRANSCRIPT
IAS 18
Revenue Recognition
Scope
(a) the sale of goods;
(b) the rendering of services;
(c) the use by others of entity assets yielding interest, royalties and dividends.
Definition
-gross inflow of economicbenefits during the period arisingin the course of the ordinaryactivities of an entity when thoseinflows result in increases inequity measured at the fair valueof the consideration received orreceivable.
Sale of Goods Criteria(a) Transfer of significant risks and rewards of
ownership of the goods to the buyer;(b) No continuing managerial involvement
associated with ownership;(c) The amount of revenue can be measured
reliably;(d) It is probable that the economic benefits
associated with the transaction will flow to theentity;
(e) The costs incurred can be measured reliably.
When to recognize revenue?
1.At the point of sale;2.At the completion of production;3.After the sale;4.During production(before sale)
Rendering of Services
(a) the amount of revenue can be measured reliably;
(b) it is probable that the economic benefits associated with the transaction will flow to the entity;
(c) the stage of completion of the transaction can be measured reliably;
(d) the costs incurred can be measured reliably.
Use of Assets by others yielding
interest royalties and dividend
(a) Probability that economic benefits will follow to the entity;(b) The amount can be measured reliably.