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CA Final · Financial Reporting · Ind AS 115 Revenue from Contracts with Customers

A reviewer comparing Ind AS 115 with IFRS 15 notes that paragraph 51 of Ind AS 115 differs on variable consideration. Which statement is correct?

Paragraph 51 of Ind AS 115 was amended to exclude penalties from the examples of why the consideration amount can vary, unlike IFRS 15. A new paragraph 51AA was inserted to explain how penalties are accounted for.

  1. AParagraph 51 of Ind AS 115 excludes penalties from its list of reasons consideration may vary, and paragraph 51AA separately explains the accounting for penaltiesCorrect
  2. BParagraph 51 of Ind AS 115 adds penalties as an extra example of variable consideration
  3. CInd AS 115 is identical to IFRS 15 on penalties, with no change to paragraph 51
  4. DInd AS 115 removes paragraph 51 and deals with variable consideration only in Appendix B

Explanation

The comparison with IFRS 15 states that paragraph 51 of Ind AS 115 was amended to exclude penalties from the examples of why consideration can vary. Paragraph 51AA was inserted to explain the accounting for penalties. So adding penalties or claiming identity with IFRS 15 is wrong.

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