IAS-18 – Revenue

Revenue should be measured at fair value of consideration received or receivable. Usually this is the inflow of cash. Discounting is needed if the inflow of cash is significantly deferred without interest. If dissimilar goods or services are exchanged (as in barter transactions), revenue is the fair value of the goods or services received or, if this is not reliably measurable, the fair value of the goods or services given up.

Revenue should be recognised when:

(i) significant risks and rewards of ownership are transferred to the buyer;

(ii) managerial involvement and control have passed;

(iii) the amount of revenue can be measured reliably;

(iv) it is probable that economic benefits will flow to the enterprise; and

(v) the costs of the transaction (including future costs) can be measured reliably