Chapter 20 PREPARATION OF FINANCIAL STATEMENTS FOR COMPANIES Learning Objectives IAS IAS 18 IAS IAS IAS IAS IAS IAS 18 IAS18 Revenue Recognition Recognition Recognition Recognitionoccurs occurs when whenititis isprobable probable that thatfuture future economic economicbenefits benefits will willflow flowto tothe theentity entity and andwhen whenthese these benefits benefitscan canbe be measured measuredreliably reliably IAS18 covers revenue from • Sale of goods • Rendering of services • Use by others of entity assets yielding interest, royalties and dividends Measurement Measurement The Theamount amountof ofrevenue revenue is isusually usuallydecided decidedby bythe the agreement agreementof ofbuyer buyerand and seller seller.However, However,the the revenue revenueis ismeasured measuredas as the thefair fairvalue valueof ofthe the consideration considerationreceived, received, i.e i.eafter aftertrade tradeand andbulk bulk discounts discounts ... revenue from • Sale of goods • Rendering of services • Use by others of entity assets yielding interest, royalties and dividends Measurement Measurement The Theamount amountof ofrevenue revenue... bythe the agreement agreementof ofbuyer buyerand and seller seller.However, However,the the revenue revenueis ismeasured measuredas as the thefair fairvalue valueof ofthe the consideration considerationreceived,