Revenue Recognition for Annual and Monthly Subscriptions by Software Companies Under Ind AS Framework
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- By Chetan Kulasri
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- Last Updated on 7 February, 2025
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This document provides an overview of the revenue recognition principles for annual and monthly subscriptions under Ind AS 115 – Revenue from Contracts with Customers. It explains that for monthly subscriptions, revenue should be recognized over time, as the service is provided, in line with the satisfaction of the performance obligation each month. For annual subscriptions, revenue should be recognized progressively over the subscription period, rather than being recognized entirely upfront. The document outlines the correct accounting treatment and journal entries for both monthly and annual subscriptions, ensuring compliance with the provisions of Ind AS 115.
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