PPT: Accounting Standards (9) | Advanced Accounting for CA Intermediate PDF Download

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ACCOUNTING STANDARDS
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ACCOUNTING STANDARDS
PRESENTATION ON ACCOUNTING STANDARDS
Team 4
AS 9 : Revenue Recognition
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ACCOUNTING STANDARDS
PRESENTATION ON ACCOUNTING STANDARDS
Team 4
AS 9 : Revenue Recognition
REVENUE RECOGNITION
? Revenue is the gross inflow of cash, receivables or 
other consideration arising in the course of the 
ordinary activities of an enterprise from the 
? Sale of goods
? Rendering of services and
? Use by others, of enterprise resources, yielding 
interest, royalties and dividends
? Recognition - Process of recording and reporting 
an item as an element of financial statement 
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ACCOUNTING STANDARDS
PRESENTATION ON ACCOUNTING STANDARDS
Team 4
AS 9 : Revenue Recognition
REVENUE RECOGNITION
? Revenue is the gross inflow of cash, receivables or 
other consideration arising in the course of the 
ordinary activities of an enterprise from the 
? Sale of goods
? Rendering of services and
? Use by others, of enterprise resources, yielding 
interest, royalties and dividends
? Recognition - Process of recording and reporting 
an item as an element of financial statement 
The revenue recognition principle provides that 
revenue is recognized:
? when it is earned, and
? when it is realized or realizable
Revenue is earned when the earnings process is 
substantially complete
Revenue is realized when goods and services 
are exchanged for cash or claims to cash
Revenue is realizable when assets received are 
convertible into a known amount of cash
Principles
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ACCOUNTING STANDARDS
PRESENTATION ON ACCOUNTING STANDARDS
Team 4
AS 9 : Revenue Recognition
REVENUE RECOGNITION
? Revenue is the gross inflow of cash, receivables or 
other consideration arising in the course of the 
ordinary activities of an enterprise from the 
? Sale of goods
? Rendering of services and
? Use by others, of enterprise resources, yielding 
interest, royalties and dividends
? Recognition - Process of recording and reporting 
an item as an element of financial statement 
The revenue recognition principle provides that 
revenue is recognized:
? when it is earned, and
? when it is realized or realizable
Revenue is earned when the earnings process is 
substantially complete
Revenue is realized when goods and services 
are exchanged for cash or claims to cash
Revenue is realizable when assets received are 
convertible into a known amount of cash
Principles
? Revenue from selling products is recognized at 
the date of sale (date of delivery).
? Revenue from services is recognized when 
services are performed and are billable.
? Revenue from the use of enterprise’s assets by 
others is recognized as time passes or as the 
assets are used up.
? Revenue from disposal of assets (other than 
inventory) is recognized at the point of sale as 
gain or loss.
Four Types of Revenue Transactions