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

Bharat Beverages Ltd sells products that attract excise duty, and its revenue recognised in the statement of profit and loss includes excise duty. According to the Ind AS 115 Indian-specific modification, what must the entity do?

Bharat Beverages must present separately the amount of excise duty included in the revenue recognised in the statement of profit and loss. Ind AS 115 added paragraph 109AA for this purpose, a difference from IFRS 15.

  1. APresent separately the amount of excise duty included in the revenue recognised in the statement of profit and lossCorrect
  2. BExclude excise duty from revenue and not disclose it anywhere
  3. CDisclose excise duty only in the notes on contingent liabilities
  4. DNet excise duty against cost of materials consumed

Explanation

Ind AS 115 includes paragraph 109AA, an addition compared with IFRS 15, requiring separate presentation of the amount of excise duty included in revenue recognised in the statement of profit and loss. Omitting or netting it against costs does not satisfy this.

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