Think of AS 9 as the answer to one simple question: when do you record a sale in your books? Not when you raise the invoice, not when cash arrives — but when you have genuinely earned the revenue. The ICAI wants students to know this standard cold, because it shows up in both MCQs and theory/practical questions in Paper 1.
AS 9 covers three types of revenue: (1) sale of goods, (2) rendering of services, and (3) income from resources — interest, royalties, and dividends. For sale of goods, revenue is recognised when significant risks and rewards of ownership pass to the buyer. This is the heart of the standard. Ask yourself: if the goods are damaged tomorrow, who bears the loss — seller or buyer? If the buyer bears it, the sale is complete. Alongside this, the seller must have no continuing managerial involvement, the revenue amount must be measurable, and collection must be reasonably certain. All five conditions must be met simultaneously.
For services, AS 9 offers two methods. The proportionate completion method recognises revenue as work progresses (match it to the stage of completion). The completed service contract method waits until the service is fully performed. ICAI expects you to know which method fits which scenario — a one-time repair job uses completed contract; an annual maintenance contract uses proportionate. For interest, accrue it on a time-proportion basis. Royalties are accrued per the agreement terms. Dividends from equity investments are recognised when the owner's right to receive payment is established (usually when the dividend is declared). One critical exclusion: AS 9 does not apply to revenue from hire-purchase/finance leases (AS 19), construction contracts (AS 7), or insurance companies. If the exam question mentions any of these, flag them out of AS 9's scope immediately.