ICAI’s Exposure Draft of ‘AS-18: Revenue’ for Comments by 4 Feb. 2019
ICAI has issued Exposure Draft of ‘Accounting Standard 18 (AS-18): Revenue’, which is an upgraded version of ICAI’s existing ‘AS-9: Revenue Recognition’ and has been drafted based on ‘Ind AS 18: Revenue’, as part of MCA initiative to align Accounting Standards (AS) with Ind AS. Comments can be submitted latest by 4 Feb. 2019.
As per the Approach Paper for upgradation of existing Accounting Standards to bring them nearer to the Ind AS as finalised by the ICAI, AS on Construction Contracts, and Revenue Recognition, based on Ind AS 11, Construction Contracts, and Ind AS 18, Revenue, respectively are required to be upgraded and not based on recently issued new standard on Revenue, viz., Ind AS 115, Revenue from Contracts with Customers. However, revenue measurement shall be based on concept of transaction price. In this direction, following is the Exposure Draft of the updated Accounting Standard (AS) 18, Revenue, issued by the Accounting Standards Board of the ICAI, for comments. Major differences between draft AS 18 and Ind AS 18 are given in Appendix 1 of draft AS 18. Similarly, major differences between draft AS 18 and AS 9 are given in Appendix 2 of draft AS 18. AS 18 refer to the following standards which are under formulation:
(i) AS 17, Leases
(ii) AS 28, Investments in Associates and Joint Ventures
(iii) AS 41, Agriculture
The objective of this Standard is to prescribe the accounting treatment of revenue arising from certain types of transactions and events. The primary issue in accounting for revenue is determining when to recognise revenue. Revenue is recognised when it is probable that future economic benefits will flow to the entity and these benefits can be measured reliably. This Standard identifies the circumstances in which these criteria will be met and, therefore, revenue will be recognised. It also provides practical guidance on the application of these criteria.
How to Comment: Comments can be submitted using one of the following methods so as to receive not later than 4 Feb. 2019:
1. Electronically: Visit the link http://www.icai.org/comments/asb/
2. Email: Comments can be sent at firstname.lastname@example.org
3. Postal: Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi – 110 002
Further clarifications on any aspect of this Exposure Draft may be sought by email to email@example.com