Navigating the New Revenue Standard


Media & Entertainment Spotlight

Navigating the New Revenue Standard

The new standard's guidance on licenses, including whether license revenue should be recognised at a point in time or over time, could result in significant changes to the timing of revenue recognition for arrangements in the industry.

On May 28, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued their final standard on revenue from contracts with customers. The standard, issued as Accounting Standards Update 2014-09 (and codified as Topic 606 in the FASB Accounting Standards Codification) by the FASB and as IFRS 15 by the IASB, outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.


On February 16, 2015, the Ministry of Corporate Affairs (MCA), notified the Companies (Indian Accounting Standards) Rules, 2015 (the 'Rules') (pending publication in the Gazette of India). The new standard notified as Indian Accounting Standard (Ind AS) 115, Revenue from Contracts with Customers is applicable for specified class of Indian entities and is similar to IFRS 15.


The new standard's requirements related to transaction price, including the measurement of variable and non-cash consideration, may change the manner in which revenue is recognised for arrangements in the industry, and management may need to use significant judgment when estimating transaction price.

Navigating the New Revenue Standard
Did you find this useful?