This question relates to IAS 18 - Revenues, which is not valid anymore...

(a) Revenue is often the largest single amount in the financial statements of a company and therefore it is very important to establish appropriate criteria for its recognition and measurement. IAS 18 – Revenue – was issued to establish such criteria.

Required:
(i) State the meaning of the term ‘revenue’ as it is used in IAS 18 and describe the requirements of IAS 18 for the measurement of revenue;

(ii) Summarise the criteria that need to be satisfied before revenue from the sale of goods can be recognised and identify any additional criteria that need to be satisfied in order to recognise revenue from the rendering of services.

Note: The total marks will be split equally between each part. (6 marks)