Short answer
SKK 8 determines when a sale is recognized as revenue and in what amount. The first rule is that revenue is only what comes into the business's own account, so VAT and any amounts collected on behalf of third parties are excluded. Goods are recognized when the risks and rewards of ownership are transferred. Services are recognized according to the stage of completion.
| Current version | SKK 8 (2023), for periods beginning on or after January 1, 2025 |
| VAT | It is not applicable. It is expressly excluded, paragraph 7. |
| Measurement | Fair value realized or realizable, after deductions, paragraph 8 |
| Sale of goods | Five simultaneous conditions, paragraph 14 |
| Services | According to the completion phase, paragraph 18 |
| When the result cannot be measured | Revenue equal to recoverable costs, paragraph 30 |
| Agency | Only the commission is known, not the full amount, paragraph 7. |
| Dividends | When the legal right to archive arises, paragraph 42 |
Verified on November 8, 2026 by Andi Haxhillari, Certified Accountant. Compared with SIK 8 (2023), paragraphs 1 through 48, version effective January 1, 2025, and with the November 2015 version containing 51 paragraphs, which is attached below.
Read also: VAT registration, threshold and 15-day deadline
Read also: Electronic invoice, NIVF, NSLF, and fiscalization certificate
The applicable version is SKK 8, updated in 2023. It applies to accounting periods beginning on or after January 1, 2025, on a prospective basis. This is specified in paragraph 47.
The November 2015 version had 51 paragraphs; the 2023 version has 48. The paragraph numbers on this page correspond to those of the version in effect.
Paragraph 4 provides four categories: the sale of products and goods; the performance of services; construction contracts when the entity is the builder; and interest, fees, and dividends.
Paragraph 5 excludes finance leases, which fall under IFRS 7. Dividends from investments in equity-method investments and in controlled entities, which fall under IFRS 14. Fair value changes of financial instruments, under IFRS 9. SKK 3. Biological assets and agricultural production under SKK 13. And insurance contracts of the insurance units.
Paragraph 7 states without leaving any room for doubt. Revenues include only the gross receipts for the account of the economic unit itself. All amounts collected on behalf of third parties, including sales taxes and value-added tax, are excluded.
So an invoice of 3,600,000 lek with 20 percent VAT contains 3,000,000 lek of revenue and 600,000 lek of VAT. The revenue is 3,000,000 lek.
The same paragraph also addresses the agency relationship. When the unit acts as an agent, the revenue is only the commission, not the entire amount that passes through the account.
This distinction alters the declared revenue, and that revenue determines thresholds such as those for VAT, the entity's category under accounting law, and the level of audit requirement.
Paragraphs 8 and 9 require measurement at fair value realized or realizable, less trade discounts, cash discounts, and quantity discounts.
When payment is deferred beyond normal terms and essentially constitutes financing, fair value is the present value of future receipts. The difference arises from interest, not from the sale.
Paragraph 13 addresses loyalty bonuses. They are a separate component of the transaction, and the portion of the price that applies is measured based on the fair value of the bonus. Thus, the points awarded today are not all current income.
Paragraph 14 requires that all five be fulfilled simultaneously.
The risks and benefits of ownership pass to the buyer. The unit does not continue management and effective control. The amount is measured reliably. It is likely that economic benefits will flow in. And costs are measured reliably.
Paragraph 15 clarifies that the transfer of risks does not always coincide with the transfer of legal title.
Paragraph 16 lists the cases in which revenue is not recognized: when a liability for unsatisfactory results remains beyond the ordinary warranty; when collection depends on the buyer's subsequent sale; when a substantial assembly remains to be completed; and when the buyer has the right to cancel.
Paragraph 17 presents the other side. When only a negligible risk is retained, revenue is recognized even without the legal title having passed. Examples include the right of return secured by a provision and the retention of title solely as a collection security.
Paragraph 18 requires recognition at the completion stage at the end of the reporting period, when the outcome can be reliably measured.
Paragraph 19 sets out four conditions. Revenues are measured reliably. It is probable that benefits will be realized. The completion stage is measured reliably. And both costs incurred and those required to complete the work are measured reliably.
Paragraph 27 provides three methods for measuring phase: the ratio of incurred costs to total estimated costs; inspection of the work performed; and the physical completion of a portion of the work.
Paragraph 21 addresses a common scenario. When the service is performed through unspecified activities over a period, such as a maintenance subscription, recognition is linear, unless another method better represents the phase.
Paragraph 30 sets out the rule when things are unclear. If the outcome cannot be reliably measured, revenues are recognized only to the extent of recoverable costs. In other words, no profit, but also no artificial loss.
Paragraph 31 requires that the expected loss be recognized immediately as an expense.
Paragraph 32 makes an important distinction. An uncollectible amount is recognized as an expense, not as an adjustment to revenues. Recognized revenues are not reversed.
Paragraph 22 requires recognition at the completion stage when the outcome is reliably measured. Paragraphs 24 and 25 indicate when a contract with multiple assets is separated and when multiple contracts are combined.
Paragraph 33 defines what constitutes contract revenue: the initial amount, plus changes to the work, claims for compensation, and incentive payments—but only when they generate revenue and can be reliably measured.
Paragraphs 34 through 36 condition these adjustments. Scope changes are recognized when the client is likely to approve them. Reimbursement claims are recognized when acceptance is possible. Incentive payments are recognized when exceeding the standards is possible.
Paragraphs 37 through 40 address costs. Direct costs, contract-related overhead, and costs specifically charged to the client are included. Expenses without a direct link are not included. Costs incurred to secure the contract are expensed if the contract is awarded in the subsequent period.
Paragraph 41 requires two conditions for all three. It is likely that economic benefits will be included, and the amount is measured reliably.
Paragraph 42 sets out the rule for each. Fees are recognized in accordance with the rights and obligations of the contract. Interest is recognized using the linear method or the effective interest rate method. Dividends are recognized when the shareholder's legal right to receive them arises.
The last point has a direct consequence. The legal right arises from the assembly's decision to distribute, not from the fact that the invested company has made a profit.
SKK 8 does not contain any numerical examples. The following example was constructed by us using rounded figures.
A studio signs a service contract for 3,000,000 lek without VAT, with total estimated costs of 2,100,000 lek. The work begins in October and ends in April of the following year.
As of December 31, costs amounting to 1,260,000 lek have been incurred. The completion phase is measured by the cost ratio, i.e., 1,260,000 divided by 2,100,000, which yields 60 percent.
The revenue recognized in the first year is 60 percent of 3,000,000 lek, or 1,800,000 lek. The recognized cost is 1,260,000 lek. The first-year result from this contract is 540,000 lek.
Note that the invoice issued does not set the amount. If the client has paid a down payment of 3,600,000 lekë with VAT, the annual revenue remains 1,800,000 lekë. The remainder is a liability to the client.
If the result could not be measured reliably—for example, because the scope of work is still being negotiated—paragraph 30 would require recognition of revenue only to the extent of recoverable costs, namely 1,260,000 lekë, resulting in zero.
Paragraph 43 requires that positive work-in-process excesses be presented as short-term assets, negative excesses as short-term liabilities, and unpaid invoices as receivables from the activity.
Paragraph 45 requires that the notes describe the recognition policies and allocate the amount by type, namely sales of goods, services, interest, fees, dividends, and other significant items.
Paragraph 46 requires for construction contracts the amount of revenue recognized, the methods for determining revenue and the stage of completion, as well as the gross amounts of receivables and payables from clients.
The first mistake is equating revenue with billing. The invoice is a tax document. Revenue is recognized when the conditions of paragraph 14 or 18 are met, which may be earlier or later than the invoice.
The second mistake is recognizing the gross amount when the business acts as an agent. Paragraph 7 allows only the commission, and this mistake inflates revenue with amounts that have never been the unit's.
The third mistake is recognizing the dividend when the investee company declares a profit. The legal right arises with the distribution decision, pursuant to paragraph 42.
The fourth mistake is recognizing the full value of a multi-month service in the month of signing. The completion phase requires allocation based on the work performed.
The fifth error is the deduction of an uncollectible claim from revenue. Paragraph 32 requires that it be recognized as an expense, and that revenue be left as originally recognized.
No. Paragraph 7 expressly excludes it, along with any amount collected on behalf of third parties.
Upon fulfillment of the conditions of the standard. For goods, when the risks and benefits of ownership are transferred. For services, according to the stage of completion. The invoice may coincide with this moment, but it does not determine it.
As an obligation until the conditions for recognition are met. The down payment is not considered earned just because the money has been deposited in the bank.
Your income is the commission. The portion that belongs to the third party is never your income, even though it passes through the account.
The legal right to realize it arises when the assembly resolves to distribute. If the investment is in a controlled entity or a joint venture, the treatment follows SKK 14.
Recognize revenue only to the extent of the costs you expect to recover, according to paragraph 30. The period result from that contract is zero, and that is the correct answer, not a temporary solution.
No. Paragraph 47 requires prospective application.
The content of this page is based on reading the 2023 version on the National Council of Accountancy's website. The paragraphs are summarized in our own words; they are not verbatim quotes.
The attached PDF below is the November 2015 version with 51 paragraphs, and its paragraph numbering does not match the current version.
SKK 8 “Revenues,” updated in 2023, paragraphs 1 through 48. Effective date January 1, 2025, with prospective application as provided in paragraph 47.
The standard refers to the “accounting law” without citing its number. The law in force is Law No. 25/2018 “On Accounting and Financial Statements,” as amended by Law No. 87/2026.
Links to other standards. Financial leases in IFRS 7. Financial instruments in IFRS 3. Biological assets in IFRS 13. Investments in equity-method investments in IFRS 14. Retirement of long-term assets in IFRS 5.
The following document is the November 2015 version with 51 paragraphs, the one in our library that was in effect until the end of 2024. The version currently in force is the updated 2023 version with 48 paragraphs.
Source of the official text: National Council of Accountancy, standards effective January 1, 2025.