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

Kaveri Beverages Ltd. sells products that attract excise duty. For the year, the revenue recognised in its statement of profit and loss includes ₹40 lakh of excise duty. Under Ind AS 115 as notified in India, how should this be treated?

Kaveri Beverages must present separately, in the statement of profit and loss, the amount of excise duty (₹40 lakh) that is included in its recognised revenue. This is an Indian carve-in to Ind AS 115 and requires explicit separate presentation rather than silent netting or reclassification.

  1. ADeduct the excise duty from revenue without any disclosure
  2. BPresent separately the amount of excise duty included in the revenue recognised in the statement of profit and lossCorrect
  3. CTreat the excise duty as a contract liability and exclude it from revenue and disclosures
  4. DDisclose excise duty only in the notes to accounts on contingent liabilities

Explanation

Ind AS 115 as notified in India includes an added requirement to present separately the amount of excise duty included in the revenue recognised in the statement of profit and loss. This differs from IFRS 15 which has no such paragraph. Deducting it silently or hiding it in contingent liabilities does not satisfy the requirement.

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