IAS18 (Revenue)

Question 1

What is the definition of Revenue?

Answer 1

The gross inflow of economic benefitsduring the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.

Question 2

When will revenue be recognised?

Answer 2

Risks and rewards of ownership have been transferred to owner.
Entity retains no continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.
Amount of revenue can be measured reliably.
Probable economic benefits will flow to the entity.
Costs incurred with respect to the transaction can be measured reliably.