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Milestone revenue recognition vs Matching concept

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This query is : Resolved

chatakonda pranay kumar (Querist)
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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?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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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.

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