Answers
Income is recognised in the income statement when an increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably. This means, in effect, that recognition of income occurs simultaneously with the recognition of increases in assets or decreases in liabilities
The definition of income as encompassing both revenue and gains is very broad, being based in effect, on statement of financial position (balance sheet) movements. The elements of the statement of financial position (assets, liabilities and equity) are defined first in the IFRS Framework, before the elements of the statement of comprehensive income. Therefore, the statement of comprehensive income is derived from the statement of financial position(according to a strict interpretation of the Framework). This is known as the asset/liability model.
Theoretically this means that once an asset is recognised or a liability reduced or derecognised, under the Framework’s asset/liability model, income is recognised simultaneously. AASB 15/IFRS 15 Revenue from contracts with Customers gives similar definition of income as the conceptual framework and they should arrive at the same outcome.
Reference: paragraph 92/IFRS15
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