IAS 18 Revenue Recognition
Introduction
This assignment features the recognition and measurement of revenue depending on the source of revenue in accordance with the provisions of International Accounting Standards (IAS) 18 Revenue.
I researched the topic and defined the special purposes of the assignment: first of all, it is important to know the main concepts of IAS 18, also to learn the rules by using this particular regulatory framework, and to get knowledge about writing the report at all.
The Report
To: Managing Director
From: Student A
Regarding: IAS 18
Date: 3/11/2011
Introduction to the Report
The Conference on International Accounting Standard (IAS) 18 Revenue was held to introduce the concepts of the regulatory framework of financial reporting and to represent the given information in convenient use of practice.
The objective of IAS 18 is to prescribe the accounting treatment for revenue arising from certain types of transaction and events (Summaries of International Financial Reporting Standards, 2001).
Key definition
According to International Accounting Standard Committee (IASC) the Framework Revenue is income that arises in the course of ordinary activities of an enterprise and is referred to by a variety of different names including sales, fees, interest, dividends and royalties (IASC, 2000).
So revenue is one of the most important indicators of accounting. It is a key factor of the profit, its assessment helps to build many financial indicators on the profitability of the activities of the organization, as well as return on investment.
A key issue when recording revenue is to define the moment of its recognition. Revenue is recognized if it is likely that the organization will receive economic benefits in the future, and these benefits can be reliably measured. IAS 18 specifies conditions where these criteria are met and therefore the revenue recognizes. This standard also
This assignment features the recognition and measurement of revenue depending on the source of revenue in accordance with the provisions of International Accounting Standards (IAS) 18 Revenue.
I researched the topic and defined the special purposes of the assignment: first of all, it is important to know the main concepts of IAS 18, also to learn the rules by using this particular regulatory framework, and to get knowledge about writing the report at all.
The Report
To: Managing Director
From: Student A
Regarding: IAS 18
Date: 3/11/2011
Introduction to the Report
The Conference on International Accounting Standard (IAS) 18 Revenue was held to introduce the concepts of the regulatory framework of financial reporting and to represent the given information in convenient use of practice.
The objective of IAS 18 is to prescribe the accounting treatment for revenue arising from certain types of transaction and events (Summaries of International Financial Reporting Standards, 2001).
Key definition
According to International Accounting Standard Committee (IASC) the Framework Revenue is income that arises in the course of ordinary activities of an enterprise and is referred to by a variety of different names including sales, fees, interest, dividends and royalties (IASC, 2000).
So revenue is one of the most important indicators of accounting. It is a key factor of the profit, its assessment helps to build many financial indicators on the profitability of the activities of the organization, as well as return on investment.
A key issue when recording revenue is to define the moment of its recognition. Revenue is recognized if it is likely that the organization will receive economic benefits in the future, and these benefits can be reliably measured. IAS 18 specifies conditions where these criteria are met and therefore the revenue recognizes. This standard also
Bibliography: ELLIOT, B., ELLIOT, J., (2007). Financial Accounting and Reporting. Accounting and reporting on an accrual accounting basis. 11th edition. London: Copyright Licensing Agency Ltd., p. 26. International Accounting Standards Committee (2000). International Accounting Standards Explained. Accounting for revenue and Expenses Revenue. London: Copyright of IASC, p. 321. International Accounting Standards Committee (2000), International Accounting Standards Explained, Accounting for Revenue and Expenses Revenue. London: Copyright of IASC, p 322. Preliminary Views on Revenue Recognition in Contracts with Customer. International Accounting Standards Board, 2008. p.77 http://www.iasb.org/NR/rdonlyres/0E3D5E00-B961-42F0-BA64-AB1D20BB9FE9/0/DP_PreliminaryViewsRevenueRecognition1208.pdf Accessed: 24 Oct 2011 Summaries of International Financial Reporting Standards. Deloitte, 2001. http://www.iasplus.com/standard/ias18.htm. Accessed: 20 Oct 2011