Accounting for revenue is one of the areas of financial reporting that seems as though it should be straightforward – recognise revenue when a sale is made – but in practice gives rise to a number of complications and difficulties.

Revenue is defined as ‘the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants’.

Not all types of revenue are addressed by section 23, which specifically covers income from the sale of goods, the rendering of services, execution of construction contracts, and the use by others of entity assets yielding interest, royalties or dividends.