Revenue recognition under IND AS 116

In Mall business, We have a Lease agreement with tenants under 2 conditions, 1st minimum rental paid on monthly basis, 2nd Revenue sharing with audited B/S or certified sales on yearly basis, whichever is higher.

So how we can do accounting or billing to tenants especially in the case of Revenue sharing bcas we are getting revenue numbers after a year. if we do a provisional revenue (for revenue sharing) method so there will be GST and E-invoicing complexity, if we did revenue booking after a year so revenue period in not relevant. pls, guide the correct methodology of revenue booking and accounting under INDAS 116 and direct and indirect taxations laws.

Replies (1)

The 5 step revenue recognition should be followed all times. This model does not consider tax complexities. Next accruals must be adopted to sort out your revenue recognition problem without the timing effect. I’m not great with taxation, the timing of tax recognition and its relevant principles must be followed.

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