This article deals with changes under Ind AS that significantly affect the accounting of revenue by Indian software/technology (IT/ITeS) companies. In addition to revenue recognition, it also deals with recognition of investment income.
The implementation of IFRS 15 ‘Revenue from Contract with Customers’ is deferred to 2018 and the implementation of the corresponding Ind AS 115 is likely to be deferred. In the interim, the Institute of Chartered Accountants of India has issued exposure drafts of Ind AS 11 (Construction Contracts) and Ind AS 18 (Revenue) corresponding to the currently effective International Standards.
Given this background, it is presumed that companies adopting Ind AS would need to converge with Ind AS 11 and Ind AS 18 as a first step, and later converge with Ind AS 115. Companies would need to keep a watch on development in this area and factor this uncertainty in their Ind AS implementation project.