IAS 18 Revenue outlines the accountancy requirements for once to recognise revenue indigenous the revenue of goods, rendering of services, and for interest, royalties and also dividends. Revenue is measured at the fair value of the consideration received or receivable and recognised as soon as prescribed conditions are met, which depend on the nature the the revenue.
You are watching: International accounting standard 18
IAS 18 to be reissued in December 1993 and is operative for periods start on or after ~ 1 January 1995.
History the IAS 18
|April 1981||Exposure draft E20 Revenue Recognition|
|December 1982||IAS 18 Revenue Recognition|
|1 January 1984||Effective date of IAS 18 (1982)|
|May 1992||E41 Revenue Recognition|
|December 1993||IAS 18 Revenue recognition (revised as component of the "Comparability of jae won Statements" project)|
|1 January 1995||Effective day of IAS 18 (1993) Revenue Recognition|
|December 1998||Amended by IAS 39 jae won Instruments: Recognition and Measurement, reliable 1 January 2001|
|16 April 2009||Appendix to IAS 18 amended for annual Improvements come IFRSs 2009. The now provides guidance because that determining even if it is an reality is acting together a major or together an agent.|
|1 January 2018||IAS 18 will certainly be superseded through IFRS 15 Revenue native Contracts with Customers|
Summary that IAS 18
Objective that IAS 18
The target of IAS 18 is come prescribe the accounting treatment for revenue occurring from certain varieties of transactions and also events.
Revenue: the gross inflow of economic benefits (cash, receivables, various other assets) emerging from the simple operating tasks of an reality (such as sales that goods, sales that services, interest, royalties, and dividends).
Measurement the revenue
Revenue need to be measured at the fair value of the consideration received or receivable.
If the inflow that cash or cash equivalents is deferred, the fair worth of the consideration receivable is less than the nominal lot of cash and cash equivalents to be received, and discounting is appropriate. This would certainly occur, for instance, if the seller is providing interest-free credit to the the person who lives or is charging a below-market rate of interest. Interest need to be imputed based upon market rates.
Recognition that revenue
Recognition, as identified in the IASB Framework, means incorporating an object that meets the an interpretation of revenue (above) in the income statement once it meets the following criteria:it is probable that any kind of future economic benefit connected with the item of revenue will circulation to the entity, andthe amount of revenue can be measured v reliability
IAS 18 offers guidance because that recognising the following certain categories that revenue:
Sale that goods
Revenue arising from the revenue of goods should it is in recognised when all of the adhering to criteria have actually been satisfied:
Rendering that services
For revenue arising from the rendering of services, provided that all of the complying with criteria are met, revenue must be recognised by reference to the stage of perfect of the transaction at the balance sheet date (the percentage-of-completion method):
See more: Companies May Sell Their Receivables This Practice Is Called
When the above criteria room not met, revenue developing from the calculation of services need to be recognised just to the level of the expenses recognised that space recoverable (a "cost-recovery approach".
Interest, royalties, and also dividends
For interest, royalties and dividends, noted that it is probable the the economic benefits will circulation to the enterprise and also the quantity of revenue can be measured reliably, revenue must be recognised as follows:
Disclosure accounting policy for recognising revenueamount of each of the following species of revenue:sale of goodsrendering of servicesinterestroyaltiesdividendswithin every of the over categories, the amount of revenue native exchanges of products or services
Appendix A to IAS 18 provides illustrative instances of how the above principles use to details transactions.