Milestone revenue recognition vs Matching concept
This query is : Resolved
07 January 2020
Hi,
We have a requirement for one of the client where we recognize revenue only once a milestone is achieved. That milestone represents that the performance obligation has been completed. So for example if we they start providing services from 1st jand and they completed the milestone on March. So ideally as per 606 we need to recognize revenue only in march since we need to recognize revenue only once performance obligation is completed. Howe ever they incurred some costs in Jan and feb but no revenue recognized in those months. So there will be only costs and revenue in Jan and Feb which is against the matching concept. Can some one help in this query? Do we need to defer costs as well?
We have a requirement for one of the client where we recognize revenue only once a milestone is achieved. That milestone represents that the performance obligation has been completed. So for example if we they start providing services from 1st jand and they completed the milestone on March. So ideally as per 606 we need to recognize revenue only in march since we need to recognize revenue only once performance obligation is completed. Howe ever they incurred some costs in Jan and feb but no revenue recognized in those months. So there will be only costs and revenue in Jan and Feb which is against the matching concept. Can some one help in this query? Do we need to defer costs as well?
22 May 2020
All Cost/Expenses needs to be recognized as per AS as and when occur but revenue can only be recognized upon agreed/completion terms & conditions.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- Exiting partner in partnership firm in gst portal
- CLOSING STOCK QUERY
- Type of Capital Gain
- F&O reporting in ITR
- Grand in aid
- Taxability of credit in canara bank ET & T section (NRO)
- Loss of interest in PF transfer from EPFO to Trust
- Technical Glitch in ITR-4 Online Form (AY 2026-27): Sec 44AE Partner Remuneration not mapping to E8
- TDS on rent received on hardship compensation being rent on redevelopment of building
- Account freezed for Ineligible ITC Scrutiny for GST Annual Return
- TDS on property - Form 141 query
- Seeking Advice: High Tax Shortfall on Job Switch + Let-Out House Property Loss in FY 2025-26
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
