ICAI’s well-acknowledged status as standard-setter par excellence got a further boost. A new Ind AS in the area of revenue recognition was notified by the MCA that has been formulated based on the recommendations made by ICAI. Ind AS is converged with International Financial Reporting Standards (IFRS).
Key amendments are issuance of new revenue standard Ind AS 115 and withdrawal of existing revenue standards and related guidance. The new Standard, mandatorily effective for the accounting period beginning on or after 1st April 2018, is based on the IFRS 15 Revenue for Contracts with Customers. It will bring in a comprehensive and robust framework (i.e. 5 step model) for the recognition, measurement and disclosure of revenue. Ind AS 115 will improve the comparability of revenue across entities, industries, global capital markets, etc., and bring in clarity in the areas such as multiple element contracts/ bundled products, licensing, royalties for intellectual properties, financing components and variable consideration.
Accounting Standards Board (ASB) of ICAI has taken up the task of upgrading the existing Accounting Standards, which is scheduled to be implemented after 1st April 2020.