TMI BlogIV - Revenue recognition (w.e.f. AY 2017-18)X X X X Extracts X X X X X X X X Extracts X X X X ..... and Disclosure Standard, the provisions of the Act shall prevail to that extent. Scope 1(1) This Income Computation and Disclosure Standard deals with the bases for recognition of revenue arising in the course of the ordinary activities of a person from ( i ) the sale of goods; ( ii ) the rendering of services; ( iii ) the use by others of the person's resources yielding interest, royalties or dividends. (2) This Income Computation and Disclosure Standard does not deal with the aspects of revenue recognition which are dealt with by other Income Computat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer. 4. Revenue shall be recognised when there is reasonable certainty of its ultimate collection. 5. Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any claim for escalation of price and export incentives, revenue recognition in respect of such claim shall be postponed to the extent of uncertainty involved. Rendering of Services 6. Subject to Para 7, revenue from service transactions shall be recognised by the percentage completion method. Under this method, revenue from service transactions is matched with the service transaction costs incurred in reaching the stage of completion, resulting in the determination of revenue, expenses and profit which can be att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Act. Transitional Provisions 11. The transitional provisions of Income Computation and Disclosure Standard on construction contract shall m utatis mutandis apply to the recognition of revenue and the associated costs for a service transaction undertaken on or before the 31st day of March, 2016 but not completed by the said date. 12. Revenue for a transaction, other than a service transaction referred to in Para 10, undertaken on or before the 31st day of March, 2016 but not completed by the said date shall be recognised in accordance with the provisions of this standard for the previous year commencing on the 1st day of April, 2016 and subsequent previous year. The amount of revenue, if any, recognised for the said tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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