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

Kaveri Spirits Ltd sells liquor and its revenue recognised in the statement of profit and loss includes excise duty collected on its own sales. Under Ind AS 115 as modified in India, what presentation is required?

The entity must present separately, in the statement of profit and loss, the amount of excise duty included in the revenue recognised. This is an Indian addition (paragraph 109AA) compared with IFRS 15, so neither silently netting the duty off nor omitting it from presentation is acceptable.

  1. AExcise duty must be netted off against revenue and not mentioned
  2. BExcise duty must be shown only as an expense and excluded from revenue
  3. CThe amount of excise duty included in the revenue recognised must be presented separately in the statement of profit and lossCorrect
  4. DExcise duty is disclosed only in the auditor's report

Explanation

Ind AS 115 as notified in India has inserted paragraph 109AA, requiring an entity to present separately the amount of excise duty included in revenue recognised in the statement of profit and loss. Netting it off silently or hiding it would breach this requirement, which is a carve-in difference from IFRS 15.

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