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

Aarav Infra Ltd has recognised impairment losses on trade receivables of Rs 4 lakh arising from contracts with customers and Rs 1 lakh on a loan given to a supplier. Under Ind AS 115, unless presented separately in the statement of profit and loss under other Standards, what is required?

The Rs 4 lakh impairment on receivables from customer contracts must be disclosed separately from the Rs 1 lakh impairment on the supplier loan. Paragraph 113(b) requires impairment losses on customer-contract receivables and contract assets to be shown apart from impairment losses on other contracts, so a combined Rs 5 lakh is not enough.

  1. ADisclose Rs 5 lakh as a single impairment figure
  2. BDisclose Rs 4 lakh separately from the impairment losses of Rs 1 lakh from other contractsCorrect
  3. CDisclose only the Rs 1 lakh loan impairment
  4. DNo disclosure, as Ind AS 109 governs impairment entirely

Explanation

Paragraph 113(b) requires disclosure of impairment losses recognised under Ind AS 109 on receivables or contract assets arising from contracts with customers, separately from impairment losses from other contracts. So Rs 4 lakh is shown separately from Rs 1 lakh. A combined Rs 5 lakh figure fails this separation.

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