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CMA Final · Corporate Financial Reporting · Revenue from Contracts with Customers (Ind AS 115)

Anand Electricals Ltd reports total revenue of Rs 1,250 lakh made up as follows: Rs 1,000 lakh from contracts with customers (including excise duty of Rs 80 lakh), Rs 150 lakh rental income under leases, and Rs 100 lakh dividend income. Neither impairment nor other items are separately presented. Applying the disclosure requirements of Ind AS 115 including paragraph 109AA, what amounts should be shown separately in the statement of profit and loss or notes?

Show Rs 1,000 lakh as revenue from contracts with customers, separate from other revenue sources of rent and dividend, and present the Rs 80 lakh excise duty included in it separately. Ind AS 115 paragraphs 113(a) and 109AA require both, so rent and dividends are not contract revenue.

  1. ARs 1,000 lakh as contract revenue, and Rs 80 lakh excise duty separately; rental and dividend income shown as other sources of revenueCorrect
  2. BRs 920 lakh as contract revenue, with excise duty removed from the revenue note and not presented
  3. CRs 1,250 lakh as contract revenue, with excise duty shown separately as Rs 80 lakh
  4. DRs 1,150 lakh as contract revenue, combining rental income, with dividend income shown separately

Explanation

Paragraph 113(a) requires revenue from contracts with customers (Rs 1,000 lakh) to be disclosed separately from other sources of revenue, which here are rent Rs 150 lakh and dividends Rs 100 lakh. Paragraph 109AA requires the Rs 80 lakh excise duty included in the revenue recognised to be presented separately. Rs 920 lakh wrongly removes the duty from revenue and hides it, while Rs 1,250 lakh and Rs 1,150 lakh wrongly include non-customer-contract income.

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