Glossary · Accounting & Audit
Ind AS 115
The Indian Accounting Standard on Revenue from Contracts with Customers, providing a 5-step model for recognising revenue.
Ind AS 115 (mirroring IFRS 15) requires entities to: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the price to each obligation, and 5) recognise revenue when (or as) each obligation is satisfied. The standard significantly impacts construction, IT services, and contract manufacturing where revenue was earlier recognised on milestones or completion.
Examples
A software company with a 3-year SaaS contract recognises 1/36 of the total price as revenue each month as the customer simultaneously receives and consumes the benefits.