What does IAS 18 say?
IAS 18 defines revenue as ‘the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants’ (1).
What is the purpose of IAS 18?
The objective of IAS 18 is to prescribe the accounting treatment for revenue arising from certain types of transactions and events.
Is IAS 18 still effective?
Effective Usage IAS 18 has been used from December 1993 and will be used until the effective date (January 2018) of IFRS 15.
What replaced IAS 18?
IFRS 15 Revenue from Contracts with Customers
IAS 18 will be superseded by IFRS 15 Revenue from Contracts with Customers, which is effective for annual periods beginning on or after January 1, 2018.
Why did IFRS 15 replace IAS 18?
Under IAS 18, the timing of revenue recognition from the sale of goods is based primarily on the transfer of risks and rewards. IFRS 15, instead, focuses on when control of those goods has transferred to the customer. This different approach may result in a change of timing for revenue recognition for some entities.
What is ifric12?
IFRIC 12 allows for the possibility that both types of arrangement may exist within a single contract: to the extent that the government has given an unconditional guarantee of payment for the construction of the public sector asset, the operator has a financial asset; to the extent that the operator has to rely on the …
What is the main difference between IAS 18 and IFRS 15 revenue recognition )?
What is IAS 18?
1 Overview IAS 18 sets out the required accounting treatment for revenue arising from the sale of goods, the rendering of services, and the use by others of assets yielding interest, royalties and dividends.
Does agency relationship exist in IAS 18?
However, it is difficult to determine the existence of agency relationship and therefore IAS 18 sets in its Appendix 4 criteria that, individually or in combination, indicate that an entity is acting as principal: The entity has the primary responsibility for providing the goods or services to customer or for fulfilling the order.
How is revenue measured under IAS 18?
[IAS 18.7] Revenue should be measured at the fair value of the consideration received or receivable. [IAS 18.9] An exchange for goods or services of a similar nature and value is not regarded as a transaction that generates revenue.
When was the appendix to IAS 18 amended?
IAS 18 was reissued in December 1993 and is operative for periods beginning on or after 1 January 1995. Appendix to IAS 18 amended for Annual Improvements to IFRSs 2009.