Forthcoming Revenue Recognition related accounting standard i.e. Ind-As 115 – Revenue from Contracts with Customers” Which is to be notified by ICAI and possibly be applicable from 1 April 2018 across all the industries irrespective of its nature and kind of services/ goods which are being sold off.
There is an interesting section under Ind-As 115 which talks about variable consideration which requires management attention because this component needs to be accounted based on estimation and account for accordingly. Let’s have a look at the relevant requirement for such Variable consideration –
Ind-As 115 – Revenue from Contracts with Customers
Para -50 -If the consideration promised in a contract includes a variable amount, an entity shall estimate the amount of consideration to which the entity will be entitled in exchange for transferring the promised goods or services to a customer.
Para -51 -An amount of consideration can vary because of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The promised consideration can also vary if an entity’s entitlement to the consideration is contingent on the occurrence or non-occurrence of a future event. For example, an amount of consideration would be variable if either a product was sold with a right of return or a fixed amount is promised as a performance bonus on achievement of a specified milestone.
Now,
Let’s look at the some specific provision as per GST act on Goods sent for approval basis-
Section 31 (7) -Notwithstanding anything contained in sub-section (1), where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the time of supply or six months from the date of removal, whichever is earlier.
Now,
please refer link to read further http://gyanifrs.com/2017/06/variable-consideration-as-per-ind-as-115-to-be-notified-by-icai-gst-section-31/
No comments:
Post a Comment