How to recognize revenue in the gambling business?
Almost a year ago, gambling was legalized in Ukraine. However, full market launch is constantly delayed, mainly due to regulatory imperfections. However, operators who plan to enter the market are now building their processes in the legal field. One of the issues for their financial function is the revenue recognition in the gambling business
Volodymyr Bohatsky, CFO of Parimatch Ukraine, explained the intricacies of revenue recognition for the gambling industry for delo.ua.
Gross Gaming Revenue (GGR) is the worldwide industry standard for revenue recognition in the gambling business. The formula for its calculation is the sum of all bets minus the sum of all winnings. That is, revenue is recognized on a net basis when player winnings reduce revenue rather than increase costs.
Is it possible to use the cash method to calculate the income tax base? Although accounting standards for the accrual method, the use of the cash method has a number of advantages for both taxpayers and tax authorities. The advantage for the payer is the simplicity of administration, as the income for the calculation of profit tax and for the calculation of income tax are the same.
This is also convenient for the tax authorities, as it is much easier to track cash flows than to deal with a huge array of information about rates. Moreover, the cash method does not lead to arrears, but on the contrary, in the case of the cash method, income is recognized slightly faster.
Read the full article on the revenue recognition in the gambling business at site delo.ua. .
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