Question

Which of the following is an example of 'REVENUE' for the purpose of AS-9?

• A. Appreciation in the value of a fixed asset.
• B. Gain resulting from changes in foreign exchange rates.
• C. Royalties receivable.
• D. Realized gain resulting from the discharge of an obligation at less than its carrying amount.

Answer 1

The correct option is C Royalties receivable.

AS-9 deals with the bases for recognition of revenue in the statement of profit and loss of an enterprise. The Standard is concerned with the recognition of revenue arising in the course of the ordinary activities of the enterprise from:

–the sale of goods,

–the rendering of services, and

–the use by others of enterprise resources yielding interest, royalties and dividends.

Revenue is the gross inflow of cash, receivables or other consideration arising in the course of the ordinary activities of an enterprise from the sale of goods, from the rendering of services, and from the use by others of enterprise resources yielding interest, royalties and dividends.