5 Step Revenue Recognition Model as per Ind AS 115

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The 5 Step Revenue Recognition Model under Ind AS 115 involves identifying the contract, identifying performance obligations, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue as the performance obligations are satisfied.

Identify the contract: Determine if there is an agreement between two or more parties that creates enforceable rights and obligations.
Identify performance obligations: Identify the promises in the contract to transfer goods or services to the customer.
Determine the transaction price: Determine the amount of consideration the entity expects to be entitled to in exchange for transferring goods or services.
Allocate the transaction price to the performance obligations: Allocate the transaction price to each performance obligation based on the relative standalone selling prices.
Recognize revenue as the performance obligations are satisfied: Recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service to the customer.

5 Step Revenue Recognition Model as per Ind AS 115

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