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

Kaveri Pharma Ltd has revenue of Rs 50 crore for the year, including Rs 6 crore of excise duty, and it also earned Rs 2 crore of interest on fixed deposits. Under the paragraphs of Ind AS 115 provided, which treatment is correct?

Kaveri must present the Rs 6 crore of excise duty included in revenue separately, as paragraph 109AA requires. It must also disclose revenue from customer contracts separately from other revenue such as interest, as paragraph 113 requires, rather than netting or merging the amounts.

  1. ADisclose only the Rs 50 crore with no further breakdown
  2. BPresent the Rs 6 crore excise duty separately and disclose customer-contract revenue apart from other revenue sources such as interestCorrect
  3. CNet the excise duty against revenue and disclose Rs 44 crore only
  4. DCombine the Rs 2 crore interest with customer revenue to show Rs 52 crore

Explanation

Paragraph 109AA requires the excise duty included in revenue to be presented separately, so Rs 6 crore is shown separately. Paragraph 113 requires revenue from customer contracts to be disclosed apart from other sources of revenue, so the interest is not merged with it. Netting the duty or combining the interest breaks these requirements.

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