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International Accounting Standard (IAS) 18
Revenue

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International Accounting Standard (IAS) 18

IAS 18

Revenue

Issued in December 1993: replaced December 1982 version of IAS 18

Recent amendment: by IAS 1 revised in September 2007

What is revenue?

      Revenue is
      (1) the gross inflow of economic benefits
      (2) occurring in the course of ordinary activities
      (3) and such inflow increases the equity

      --> an increase in equity
      --> due to the contributions from equity participants
      --> is not revenue

Revenue is measured
--> at the fair value of the consideration
--> received or receivable

Revenue from the sale of goods
      --> recognised when all of the following conditions are met:

      (1) significant risks and rewards of ownership are transferred
      (2) revenue amount can be reliably measured
      (3) costs can be reliably measured
      (4) inflow of economic benefits is probable
      (5) no continuing managerial involvement
           and no effective control over the goods sold

Interest, royalties and dividends
      --> recognised when all of the following conditions are met:

      (1) inflow of economic benefits is probable
      (2) revenue amount can be reliably measured

Interest revenue
--> recognised using effective interest method

Royalties
--> recognised on an accrual basis

Dividends
--> recognised when
--> the shareholder's right (to receive payment) is established

IAS 18 Technical Notes