Accounting Standards 11

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Exposure Draft
Accounting Standard (AS) 9 (Revised 20XX) (Corresponding to IAS 18) Revenue

(Last date for Comments: June 07, 2010)

Issued by Accounting Standards Board The Institute of Chartered Accountants of India

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Exposure Draft Accounting Standard 9 (Revised 20XX) (Corresponding to IAS 18) Revenue Contents Objective Scope Definitions Measurement of revenue Identification of the transaction Sale of goods Rendering of services Interest, royalties and dividends Disclosure Effective date 1–6 7–8 9–12 13 14–19 20–28 29–34 35–36 37–39

Paragraphs

Appendices A Revenue—Barter Transactions Involving Advertising Services (Corresponding to SIC 31) Customer Loyalty Programmes (Corresponding to IFRIC 13) Agreements for the Construction of Real Estate (Corresponding to IFRIC 15) Transfers of Assets from Customers (Corresponding to IFRIC 18)

B C D

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E

References to matters contained in other Accounting Standards

F

Illustrative examples
Sale of goods Rendering of services Interest, royalties and dividends Recognition and measurement

G H

Comparison with IAS 18, Revenue Major differences between the Exposure Draft of AS 9 (Revised 20XX), Revenue, and the existing AS 9 (Issued 1985)

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INVITATION TO COMMENT
The Accounting Standards Board of the Institute of Chartered Accountants of India invites comments on any aspect of this Exposure Draft of the Accounting Standard (AS) 9 (Revised 20XX), Revenue. The Board would particularly welcome answers to the questions set out below. Comments are most helpful if they indicate the specific paragraph or group of paragraphs to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording. Comments should be submitted in writing to the Secretary, Accounting Standards Board. The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi – 110 002, so as to be received not later June 07, 2010. Comments can also be sent by e-mail at edcommentsasb@icai.org or asb@icai.org. The principles proposed to be laid down in Appendix C of the Exposure Draft AS 9 (Revised 20XX) are different from the guidance provided in the Guidance Note on Recognition of Revenue by Real Estate Developers issued by the Council of the Institute of Chartered Accountants of India. It is proposed that the said Guidance Note will be withdrawn on AS 9 (Revised 20XX) coming into force. Appendix C of the Exposure Draft of AS 9 (Revised 20XX) provides guidance on how to determine whether an agreement for the construction of real estate is within the scope of AS 7 (Revised 20XX) Construction Contracts or Exposure Draft of AS 9 (Revised 20XX) Revenue and, accordingly, when revenue from the construction of real estate should be recognised. This Appendix provides that an agreement for the construction of real estate is a construction contract within the scope of AS 7 (Revised 20XX) only when the buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress (whether it exercises that ability or not). In case, an agreement for the construction of real estate in which buyers have no or only limited ability to influence the design of the real estate, it is within the scope of AS 9 (Revised 20XX).

If AS 7 (Revised 20XX) applies: Revenue is recognised on a percentage-of-completion basis provided that reliable estimates of construction progress and future costs can be made. If Exposure Draft of AS 9 (Revised 20XX) applies: The agreement can be for rendering services and it can be for sale of goods. If the entity is not required to acquire and supply construction materials, it is an agreement for rendering services. If the entity is required to provide services together with construction materials in order to perform its contractual obligation to deliver real estate to the...
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