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

Himalaya Textiles Ltd reports under Ind AS. In its financial statements for the year, it has revenue from sale of fabrics to customers under contracts, and also interest income on fixed deposits and rental income from a leased-out warehouse. Which presentation is consistent with Ind AS 115 disclosure requirements?

Himalaya Textiles must disclose revenue recognised from contracts with customers separately from its other revenue sources such as interest and rent, unless these amounts are already presented separately in the statement of profit and loss under other Standards, as paragraph 113(a) requires.

  1. ADisclose revenue recognised from contracts with customers separately from its other sources of revenue, unless presented separately in the statement of profit and loss under other StandardsCorrect
  2. BCombine contract revenue, interest income and rental income into a single revenue figure without separate disclosure
  3. CDisclose contract revenue separately only if it exceeds 90% of total income
  4. DDisclose only the revenue from other sources, since contract revenue is already evident from the profit and loss

Explanation

Paragraph 113(a) requires revenue recognised from contracts with customers to be disclosed separately from other sources of revenue, unless those amounts are presented separately in the statement of profit and loss under other Standards. Interest and rent are not contract-with-customer revenue, so merging them is wrong. No percentage threshold exists in the text.

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