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

Kaveri Infra Ltd reports under Ind AS. Its financial statements show revenue from customer contracts of Rs 50 crore, rental income of Rs 3 crore, and impairment of Rs 2 crore on contract assets from customers plus Rs 1 crore on a loan to a supplier. The items are not shown on the face of the statement of profit and loss. What must the notes disclose under Ind AS 115?

Kaveri must disclose Rs 50 crore of revenue from customer contracts separately from Rs 3 crore rental income. It must also disclose the Rs 2 crore impairment on customer contract assets separately from the Rs 1 crore impairment on the supplier loan, as paragraph 113 requires.

  1. ARevenue of Rs 53 crore in total and impairment of Rs 3 crore in total
  2. BRevenue from customer contracts of Rs 50 crore separately from rental income, and impairment of Rs 2 crore on customer contract assets separately from the Rs 1 crore on other contractsCorrect
  3. CRevenue of Rs 50 crore only, with no disclosure of impairment
  4. DImpairment of Rs 3 crore netted against revenue to show Rs 47 crore

Explanation

Paragraph 113 requires revenue from customer contracts (Rs 50 crore) to be disclosed separately from other revenue such as rent (Rs 3 crore). It also requires impairment on customer receivables or contract assets (Rs 2 crore) to be separate from other impairment (Rs 1 crore on the supplier loan). Totals or netting, giving Rs 53 crore or Rs 47 crore, are wrong.

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