07 Dec
What is your understanding about the revenue recognition concept explain in brief?
Essentially, the revenue recognition principle means that companies’ revenues are recognized when the service or product is considered delivered to the customer — not when the cash is received. Determining what constitutes a transaction can require more time and analysis than one might expect
The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
What are the five steps of IFRS 15?
5-step model
- Identify the contract.
- Separate performance obligations.
- Determine transaction price.
- Allocate transaction price.
- Recognize revenue.
