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

Gujarat Pumps Ltd has trade receivables and contract assets arising from customer contracts. During the year it recognised an impairment loss of Rs 4 lakh on receivables from customer contracts and Rs 3 lakh on a loan given to a supplier. How should the impairment be disclosed under Ind AS 115 (unless presented separately in the statement of profit and loss under other Standards)?

The Rs 4 lakh impairment on receivables and contract assets from customer contracts must be disclosed separately from the Rs 3 lakh impairment on the supplier loan. Ind AS 115 requires customer-contract impairment losses to be shown apart from impairment losses on other contracts.

  1. ARs 7 lakh as a single combined impairment loss
  2. BRs 4 lakh on contract receivables and contract assets disclosed separately from the Rs 3 lakh on other contractsCorrect
  3. CRs 3 lakh only, as supplier loans are more significant
  4. DNo disclosure, since Ind AS 109 governs impairment entirely

Explanation

Para 113(b) requires impairment losses recognised under Ind AS 109 on receivables or contract assets arising from contracts with customers to be disclosed separately from impairment losses from other contracts. So Rs 4 lakh is shown separately from the Rs 3 lakh. Combining to Rs 7 lakh fails this.

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