MCA has recently notified the new accounting standards on revenue, Ind AS 115 – Revenue from Contracts with Customers, mandatorily applicable from 1 April 2018.
IASB has already issued the corresponding standard which is applicable from 1 January 2018. This standard represents the culmination of years of research and deliberation between IASB and FASB.
Ind AS 115/IFRS 15 will apply to most revenue arrangements, including construction contracts. Among other things, it changes the criteria for determining whether revenue is recognised at a point in time or over time and provides more guidance in areas where current IFRSs are lacking – such as multiple element arrangements, variable pricing, rights of return, warranties and licensing. The actual impact on each company’s top line will depend on the industry, specific customer contracts and how they have applied existing standards.