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

Bharat Spirits Ltd sold goods to customers for Rs 12,00,000 in the year, and this amount includes excise duty of Rs 1,80,000. Under the Ind AS 115 Indian modification relating to paragraph 109AA, what is required?

Bharat Spirits must present the excise duty of Rs 1,80,000 included in its revenue separately in the statement of profit and loss. Ind AS 115 inserts paragraph 109AA to require this separate presentation of excise duty included in recognised revenue.

  1. AExcise duty must be deducted and only Rs 10,20,000 shown as revenue, with no further disclosure
  2. BExcise duty is ignored for presentation purposes
  3. CThe amount of excise duty of Rs 1,80,000 included in revenue must be presented separately in the statement of profit and lossCorrect
  4. DExcise duty must be disclosed only in the notes on contingent liabilities

Explanation

Paragraph 109AA is inserted in Ind AS 115 to require separate presentation of the excise duty included in revenue recognised in the statement of profit and loss. Revenue therefore still includes it, with Rs 1,80,000 shown separately.

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