Customer Identification Under Ind AS 115 When Operating as Principal or Agent Under a Contract
- Blog|News|Account & Audit|
- < 1 minute
- By Taxmann
- |
- Last Updated on 5 February, 2024
Latest from Taxmann
As per Ind AS 115, an entity is required to consider all relevant facts and circumstances, such as the purpose of the activities undertaken by the counterparty, to determine whether the counterparty is a customer. The identification of the performance obligations in a contract can also have a significant effect on the determination of which party is the entity’s customer. An entity shall apply Ind AS 115 to a contract only if the counterparty to the contract is a customer. A customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration.
In the given case, the company is engaged in providing advertising services to other companies. The company approaches the publishers based on the following two methods-
(a) The Company pre-purchases the advertisement space from the publishers before it finds advertisers for that space (Principal to Principal basis)
(b) The Company provides the service of matching the advertisers with the publishers (Intermediation services as agent/broker)
This case study discusses which party will be identified as the customer under Ind AS 115 in each of the above two cases.
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
