What do you know about Ind AS 115 and five step model?

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Ind AS 115 is a revenue recognition standard that outlines a five step model for recognizing revenue from contracts with customers.

Ind AS 115 is based on the principle that revenue should be recognized when goods or services are transferred to the customer at the amount the entity expects to be entitled to.
The five step model includes: identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when each performance obligation is satisfied.
For example, if a software company sells a software license along with a maintenance agreement, they would need to allocate the transaction price between the license and maintenance services.
Ind AS 115 aims to provide a more consistent and comprehensive framework for revenue recognition across industries.
The standard also requires enhanced disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

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