Google India’s FY19 revenue halves due to change in accounting standards
- However, profit rose 16% to ₹473 crore during the period ending 31 March, 2019
- Advertising revenue of the company fell to 28% from 69% a year ago
New Delhi: Google India’s revenues more than halved to ₹4,147 crore in the year ended 31 March, 2019, due to changes in accounting standards. A year ago, the company reported a revenue of ₹9,377 crore.
Advertising revenue fell to 28% from 69% a year ago, but profit rose 16% to ₹473 crore during the reporting period.
Accounting standards changed to IND AS 115 from IND AS 18, according to the regulatory filings sourced through Tofler, a business intelligence platform.
According to the filing, the Ministry of Corporate Affairs (MCA) on 28 March, 2018, notified Ind AS 115 as the new standard effective for accounting periods beginning on or after 1 April, 2018. “As per IND AS 115, as the control to operate the adword platform is with GAP (Google Asia Pacific) and not with the Company, accordingly, revenues and associated direct cost of sales are presented on a net basis in the statement of profit or loss and comprehensive income,” Google said in the filing.
While Google claims that it is the third party reseller of advertising space of Google Adwords programme and other Google advertising products and services in India, Indian tax authorities insist that such transfers are royalty payments and must be taxed.
According to Tofler, Google has said IT enabled services contributed 36%, IT services 36%, and advertising revenue 28% to Google India’s total turnover.
Google and Facebook are the world’s top two digital advertising players. According to eMarketer, Google is expected to generate $105.33 billion in net digital ad revenue in 2019, giving it a 32% share of the worldwide digital ad market. Facebook is second with a 21.1% share.
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First Published:23 Oct 2019, 01:12 PM IST
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