Revenue recognition criteria set out in the Objective paragraph of IAS 18.
Revenue from the sale of goods can be recognised when the following conditions have been satisfied: (IAS 18 paragraph 14)
(a) The entity has transferred to the buyer the significant risks and rewards of ownership of the goods;
(b) The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
(c) The amount can be reliably estimated
(d) It is probable that the economic benefits associated with the transaction will flow to the entity; and
(e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.
On the other hand, the revenue from a service transaction can be recognized when all of the following conditions are satisfied 🙁 IAS 18 paragraph 20)
(a) The amount of revenue can be measured reliably;
(b) It is probable that the economic benefits associated with the transaction will flow to the entity;
(c) The stage of completion of the transaction at the end of the reporting period can be measured reliably; and
(d) The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
Only paragraphs (a), (b) and (d) of the recognition criteria for the sale of services are the same as those for the sale of goods (paragraphs (c) and (d). Of these, (a) and (b) for services [and (c) and (d) for goods] repeat the recognition criteria set out in the Objective paragraph of IAS 18.