Poojitha Raam Vinay
Quick Summary
AS 9 Revenue Recognition
AS 9 is Not Applicable For
When to recognise revenue?
- Significant Risk and Rewards of ownership is transferred
- Entity does not retain any Effective control Goods sold
- Cost can be reliably Measured
- Collection of the revenue is certain
- Stage of completion is measurable and is certain.
When one of the above is not certain then
I. Revenue to be Recognised When there is Sale Of Goods
II. Revenue to be Recognised Services are Rendered
III. Revenue to be Recognised In Various Cases
Disclosures
In addition to the disclosures required by AS 1 on 'Disclosure of Accounting Policies', an enterprise should also disclose the circumstances in which revenue recognition has been postponed cause of significant uncertainties.
Also Read:
FAQ :
AS 9 focuses on when revenue should be recognised, particularly concerning the transfer of significant risks and rewards of ownership.
Revenue can be recognised when the significant risks and rewards of ownership are transferred, the entity has no effective control, the cost of goods sold can be reliably measured, collection of revenue is certain, and the stage of completion is measurable and certain.
If the conditions for revenue recognition are not met, revenue is recognised when there is a sale of goods, or when services are rendered.
In addition to disclosures required by AS 1, enterprises must disclose circumstances where revenue recognition has been postponed due to significant uncertainties.
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