A review of the key concepts and principles of International Accounting Standard 18 (IAS18) on Revenue.
The course includes theoretical principle lectures including a Standard on a page (SOAP) summary. These principles are then illustrated practically in class examples that focus on journalising the recognition and measurements principles contained in the standard.
You will need to download the lecture slides and work through the lecture videos and the class examples.
The course is structured to assist three categories of delegates who require knowledge of International Financial Reporting Standards (IFRS):
The Tabaldi approach is practical and our lecturers focus on making the sometimes complex principles of financial reporting simple and practical.
You will need to engage with the lecturer with pen in one hand and calculator in the other, mental application and a proactive approach will ensure that you master this topic under financial reporting and accounting.
The lecture notes presentation in pdf format. Please make sure you have these notes ready in a workable format before proceeding with the lecture videos. The notes have spaces for you to do workings and add to the presenter notes, remember that this course is interactive and requires active participation. Have a pen and calculator ready. Let's begin.
A high level overview video of the key concepts within IAS 18, focussing on the main issue of when to recognise revenue (revenue recognition criteria) and at what value. This video includes a summary of IAS 18 in our standard on a page (SOAP).
A video discussion covering the objective and scope of IAS 18, as well as laying out the definition of revenue.
A video discussion of revenue measurement in terms of IAS 18, including two practical workings for discounting of deferred payment terms and the treatment of revenue barter / exchange transactions.
A class example video illustrating the discounting of revenue. You will need a financial calculator and some mental application to work through this example with your lecturer.
A video covering Barter transaction class example 1 from your notes. This example illustrates the principles needed to account for a basic exchange of dissimilar goods that are within the scope of IAS 18 as revenue.
Please note that barter or exchange transactions that do not relate to revenue, for instance exchange of Property, Plant and Equipment are treated differently and not within the scope of IAS 18.
Barter transaction class example 2 video, illustrating basic exchange of similar goods and how to treat these transactions that do not give rise to revenue due to there being no commercial substance to the exchange.
Lecture video summarising WHEN to recognise revenue and discussion as to recognition of components of revenue.
This video contains some repetition from earlier videos, but please work through again in order to ensure that these vital principles are embedded into your memory and working knowledge.
Class example illustrating the recording of different components of revenue - sale of goods and services rendered. Please ensure that you have printed the class example from your notes and work through with your lecturer. Remember you can pause the video to give yourself time to make your own attempts before watching the solution provided by the lecturer.
A video lecture summarising the recognition criteria for interest, dividend and royalties income.
Remember, interest recognised on time proportionate basis using the effective interest rate method; dividend recognised when the shareholders right to receive dividend is established, and royalty revenue is recognised in accordance with the underlying agreement.
Class example video illustrating interest income calculations using the effective interest rate method. Make sure you are comfortable with the workings on your financial calculator.
Class example video illustrating the treatment of trade and cash discounts in revenue recognition. Remember, you do not recognise a separate line item in expenses for discounts given, the discount must reduce revenue directly!
Class example video illustrating the treatment of basic settlement discounts with no change in estimate in revenue recognition.
Guidance on how to approach revenue questions and transactions - treat as review of principles
Video lecture laying out the basic revenue disclosure requirements per IAS 18.
Please note that this is by no means a 100% complete list of disclosures, but aims to cover the major disclosure areas of revenue under IAS 18.
Extracts from the Ernst And Young illustrative financial statements - Good Group (interntational) Limited.
We have extraced the statement of profit or loss (note that IAS 1.82(a) requires disclosure of total revenue as a line item on the face of the statement of profit or loss. The Group has elected to present the various types of revenues on the face of the statement of profit or loss. This information could also be presented in the notes.) The statement of financial position is also included to illustrate the deferred revenue liability.
The revenue accounting policy note is included and the note on Deferred Revenue.
The full set of illustrative financials can be found at:
Brief discussion of the most common illustrative examples accompanying IAS 18 for sale of goods. Includes Bill and Hold Sales, Goods shipped subject to conditions, Lay Away sales, Limited right of return, consignment sales, and COD sales.
Brief discussion of the most common illustrative examples accompanying IAS 18 for services rendered. Includes subscriptions, real estate sales, advertising commissions, insurance agency commissions, admission fees, tuition fees and franchise fees
Class example illustrating revenue recognition when there is a significant testing and installation component to the contract
Class example illustrating the recognition principles for revenue transactions with goods shipped subject to conditions
Class example illustrating the revenue recognition principles for lay away (lay-by) sales
Tabaldi Education is an organisation that specialises in Accounting and Financial Reporting training and consulting.
Our lecturing team at Tabaldi consists of a group of highly qualified Chartered Accountants who have lectured at undergraduate and postgraduate level, as well as having presented professional accounting training around the world.
Richard Starkey one of Tabaldi's leading lecturers has had years of experience lecturing and consulting for large international corporates, including the big four audit firms within South Africa. Listed companies in Europe, Africa and the Middle East. Richard is passionate about helping people master the basic principles of financial reporting, and takes an interactive journal driven approach to his lectures.