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

Bharat Spirits Ltd reports Rs 500 crore of sales to customers, which includes Rs 80 crore of excise duty collected on its own account. Under the Indian-specific paragraph 109AA of Ind AS 115, how should the excise duty be treated in the statement of profit and loss?

Ind AS 115 paragraph 109AA requires the entity to present separately, in the statement of profit and loss, the amount of excise duty included in the revenue recognised. For Bharat Spirits, the Rs 80 crore must be shown separately, with no materiality threshold or note-only alternative.

  1. ADeducted from revenue and not disclosed anywhere
  2. BPresented as a separate line within the other expenses only
  3. CThe amount of excise duty included in revenue must be presented separately in the statement of profit and lossCorrect
  4. DRecognised only in the notes if it exceeds 10% of revenue

Explanation

Paragraph 109AA was inserted in Ind AS 115 to require separate presentation of the excise duty amount included in revenue in the statement of profit and loss. Here Rs 80 crore of the Rs 500 crore revenue must therefore be shown separately. Removing it silently from revenue or burying it in the notes does not satisfy the requirement, and no 10% threshold exists.

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