Issuance of New Revenue Standard Ind AS 115
An important development in Ind AS Framework i.e. a new Ind AS in the area Revenue recognition has been notified by Ministry of Corporate Affairs which was formulated based on recommendation made by The Institute of Chartered Accountants of India.
The key amendment is the issuance of new Revenue standard Ind AS 115 and withdrawal of existing revenue standards and related guidance. The new revenue standard is mandatorily effective for accounting periods beginning on or after 1 April 2018.
The New Revenue Standard viz. Ind AS 115 is based on IFRS 15 Revenue for Contracts with Customers which is the culmination of IFRS and US GAAP convergence project. Information about revenue is very important and is used to assess a company’s financial performance and position and to compare that company with other companies. New Revenue Standard brings in a comprehensive and robust framework (‘5 Step’ Model) for recognition, measurement and disclosure of revenue. Particularly, Ind AS 115:
CA. Naveen N.D. Gupta, President, ICAI said, “ICAI is committed to enhance the quality of financial reporting in India and align in with the best global practices so that the nation and it’s economy benefits from high quality globally acceptable financial reporting standards formulated on transparent and fair basis. ICAI strongly believes remaining converged with IFRS Standards at all times will enable Indian entities to raise funds at globally competitive rates by eliminating country specific discount phenomena such as India discount, Korea discount etc.”
CA.S.B.Zaware, Chairman, Accounting Standards Board, ICAI added, “ICAI continues to play sheet anchor role in the Financial Reporting Standards setting framework as enshrined in Section 133 of the Companies Act 2013.”