steps of ind as 115
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The standard shall be applied to all contracts with customers, except the following:
a) lease contracts within the scope of Ind AS 17, Leases;
b) insurance contracts within the scope of Ind AS 104, Insurance Contracts;
c) financial instruments and other contractual rights or obligations within the scope of Ind AS 109, Financial Instruments, Ind AS 110, Consolidated Financial Statements, Ind AS 111, Joint Arrangements, Ind AS 27, Separate Financial Statementsand Ind AS 28, Investments in Associates and Joint Ventures; and
d) non-monetary exchanges between entities in the same line of business to facilitate sales to customers or potential customers. For example, a contract between two oil companies that agree to an exchange of oil to fulfill demand from their customers in different specified locations on a timely basis.
The standard shall apply only if the counterparty to the contract is a customer.
A customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration.
FIVE STEP MODEL
The new revenue recognition model prescribed by Ind AS 115 consists of below five steps:
A. Identify the contract(s) with a customer;
B. Identify the separate performance obligations in the contract;
C. Determine the transaction price;
D. Allocate the transaction price to the separate performance obligations; and
E. Recognize revenue when (or as) each performance obligation is satisfied.