ACCOUNTING STANDARD (9)

Revenue Recognition

A presentation by-
Ridhi Khanna
26 1
What Are Accounting Standards ?

• A written documents or policy documents

prepared by an expert body or government body
or any other regulatory body for true disclosure
and presentation of financial statements

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What Is “REVENUE RECOGNITION” ?

REVENVE RECOGNITION means ‘timing of recording

of revenue‘ in normal course of transaction.
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 Revenue Recognition
The accounting standard is mandatory in nature and
is to be applied on all entities.

REVENUE : It means gross inflow of cash and receivables arising from

1. Sale of goods.
2. Rendering of services .
3. From interest, dividend, royalty.

RECOGNITION : process of recording and reporting an item.

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 AS9 does not deal with the following types of
revenue:-

1. Sale of fixed assets

2. Exchange of differences
3. Holding gains from current / non current assets
4. Remission of liabilities

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 REVENUE RECOGNITION

1. Sale of goods
2. Rendering of services
3. From interest ,dividend ,royalty

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1. Sale of Goods
• Revenue should be recognized if all of following conditions are
satisfied

•Transfer of ownership of goods

A

•Transfer of risk and rewards

B

•No uncertainty regarding consideration

C and collection

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2. Rendering of Services
METHODS

COMPLETED CONTRACT PERCENTAGE OF

METHOD COMPLETION METHOD

Services have been Services have been

wholly performed
performed partly

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2. Rendering of Services
• Revenue should be recognized if all the following conditions are
satisfied

•Services have been performed

A

•No uncertainty regarding consideration and

collection
B

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3. Revenue from Dividend, Interest ,Royalty

•No uncertainty regarding consideration and

its ultimate collection
A

•Performance has been completed

B

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 • Performance has been completed
B

DIVIDEND
when the owners right to dividend has been established

INTEREST
When the time period have expired

ROYALTY
Condition of royalty agreement have been satisfied
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DISCLOSURE REQUIREMENT

1. Revenue recognition policy

2. If major revenue has not been recognized , facts
should be given

Accounting
Standard
9

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QUESTIONS ?
• Please Ask any question followed by slide number
THANK YOU
For your valuable time.