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• Annual Report 2018-19
Shaping the future of software driven business
The Group has applied the principles under Ind AS 115 to account for revenues from these performance obligations.
When support services are provided in conjunction with the licensing arrangement and the license and the support
services have been identified as two separate performance obligations, the transaction price for such contracts
are allocated to each performance obligation of the contract based on their relative standalone selling prices
Maintenance revenue is recognized proportionately over the period in which the services are rendered.
Revenue from revenue share is recognized in accordance with the terms of the relevant agreements.
The Group accounts for volume discounts and pricing incentives to customers as a reduction of revenue based on the
proportionate allocation of the discounts amount to each of the underlying performance obligation that corresponds
to the progress by the customer towards earning the discount. Also, when the level of discount varies with increases
in levels of revenue transactions, the Group recognizes the liability based on its estimate of the customer’s future
purchases. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be
estimated reliably, then discount is not recognized until the payment is probable and the amount can be estimated
reliably. The Group recognizes changes in the estimated amount of obligations for discounts in the period in which
the change occurs.
Unbilled revenue represents revenue recognized in relation to work done until the balance sheet date for which
billing has not taken place.
Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized.
The Group collects Goods and Service Tax, value added taxes (VAT) on behalf of the government and, therefore, these
are not economic benefits flowing to the Group. Hence, they are excluded from revenue.
Revenue from time and material engagements is recognized on time proportion basis as and when the services are
rendered in accordance with the terms of the contracts with customers.
(ii) Interest
Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective
interest rate. Interest income is included under the head ‘Other income’ in the statement of profit and loss.
(iii) Dividend
Dividend income is recognized when the Group’s right to receive dividend is established. Dividend income is included
under the head ‘Other income’ in the statement of profit and loss.
(l) Government grants
Government grants are recognised at fair value when there is reasonable assurance that the Group will comply with the
conditions attaching to them and the grants will be received. Grants related to purchase of assets are treated as deferred
income and allocated to income statement over the useful lives of the related assets while grants related to expenses are
deducted in reporting the related expenses in the income statement.
(m) Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the respective functional currencies of the entities in the Group, by applying
to the foreign currency amount the exchange rate between the functional currency of each individual entity and the
foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are reported using the exchange rate prevailing at the reporting date. Non-monetary
items, which are measured in terms of historical cost denominated in a foreign currency are reported using the exchange
rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation
denominated in a foreign currency are reported using the exchange rates at the date when the values were determined.
Notes forming part of consolidated financial statements (Contd.)