The India unit of Google has reported a 55.5 per cent dip in revenue to Rs 4,147 crore during FY19. It has decreased from Rs 9,337 crore in the previous year. The last time its turnover stood at similar levels was in FY15, at Rs 4,108 crore.
Google India’s profit increased by 16 per cent to Rs. 473 crore in the financial year ending March 31 as expenses plummeted 61 per cent during the year to Rs. 3,416 crore. A sharp fall in expenses helped bolster profits. The company has said in the filing that the revenue slip reason is the adoption of Ind-AS accounting standards. Google India now only recognises the net revenues it makes from India.
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Ind-AS 115, a new revenue recognition standard has replaced the older Ind-AS 11 and Ind-AS 18 with effect from April 1 2018, the Ministry of Corporate Affairs had notified in March 2018. The new standard was applicable from FY19 onwards. According to ICAI, the chartered accountants apex body, the new standard helped in improved disclosures and also reduced the scope for interpretations on various areas.
Google has shifted the revenue recognition for its ‘AdWords’ business from India to Singapore-based Google Asia Pacific. This has also resulted in the revenue dip. The control to operate the AdWords platform is with GAP (Google Asia Pacific). It does not rest with the Google India company thus the revenues and associated direct cost of sales are presented on a net basis in the statement of profit or loss and comprehensive income.