IAS 18 — Revenue Recognition

Abstract

IAS 18 prescribes the accounting treatment for revenue arising from certain types of transactions and events. During an audit of financial statements, the revenue and expense section is regarded as an integrated component of the total audit process, because it is intertwined with other parts of the audit. The procedures interrelate with the different types of tests covered in the other audit programmes. During the audit and the transition process of the various balance sheet sections, it is necessary to gather evidence about the fair presentation of various income statement accounts. Recognition and measurement criteria of IAS statements covering balance sheet items also define amounts and additional reporting requirements for revenue recognition. Therefore, the transition programme for revenues focuses primarily on general procedures and should refer to other applicable transition programmes where appropriate¹⁵⁶.