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Please provide summary on Ind AS 115 - Revenue from Contracts with Customers

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Prity asked about 3 years ago

Please provide summary on Ind AS 115 - Revenue from Contracts with Customers

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3 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Ashika answered over 2 years ago

The objective of this Standard is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. An entity shall consider the terms of the contract and all relevant facts and circumstances when applying this Standard. An entity shall apply this Standard, including the use of any practical expedients, consistently to contracts with similar characteristics and in similar circumstances. This Standard specifies the accounting for an individual contract with a customer. However, as a practical expedient, an entity may apply this Standard to a portfolio of contracts (or performance obligations) with similar characteristics if the entity reasonably expects that the effects on the financial statements of applying this Standard to the portfolio would not differ materially from applying this Standard to the individual contracts (or performance obligations) within that portfolio

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Open uri20170510 32134 1ue0f38?1494421710 rohit agarwal answered almost 3 years ago

Please provide summary on Ind AS 115 - Revenue from Contracts with Customers The objective of this Standard is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. An entity shall consider the terms of the contract and all relevant facts and circumstances when applying this Standard. An entity shall apply this Standard, including the use of any practical expedients, consistently to contracts with similar characteristics and in similar circumstances. This Standard specifies the accounting for an individual contract with a customer. However, as a practical expedient, an entity may apply this Standard to a portfolio of contracts (or performance obligations) with similar characteristics if the entity reasonably expects that the effects on the financial statements of applying this Standard to the portfolio would not differ materially from applying this Standard to the individual contracts (or performance obligations) within that portfolio. When accounting for a portfolio, an entity shall use estimates and assumptions that reflect the size and composition of the portfolio.

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Data?1494421730 rohit awasthi answered about 3 years ago

Dear Friend > Ind AS 115 - Revenue from Contracts with Customers This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognised. The underlying principle is that an entity will recognise revenue to depict the transfer of goods or services to customers at an amount it expects to be entitled to in exchange for those goods or services. The standard can significantly change how entities recognise revenue, especially those that currently apply industry-specific guidance. The standard will also result in a significant increase in the volume of disclosures related to revenue. While applying the new standard, entities will have to follow the following five-step process: 1. Identify the contract with a customer - Contracts can be oral or written. 2. Identify the separate performance obligations in the contract - A performance obligation is a promise to transfer a distinct good or service to a customer. The promise can be explicit, implicit or implied by an entity’s customary business practice. 3. Determine the transaction price - The transaction price is the amount of consideration that an entity expects to be entitled to in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of a third party. 4. Allocate the transaction price to the separate performance obligations - The transaction price is allocated to the separate performance obligations in a contract based on the relative stand-alone selling prices of the goods or services promised. 5. Recognise revenue when (or as) each performance obligation is satisfied - The final step in the model is recognising revenue. An entity will recognise revenue when (or as) a good or service is transferred to the customer and the customer obtains control of that good or service. Additional considerations - Certain additional concepts in Ind AS 115 1. Multiple element arrangements 2. Variable consideration 3. Time value of money 4. Contract costs 5. Disclosures 6. Service concession arrangements: Appendix C to Ind AS 115 Thanks

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