Skip to content

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

Kaveri Traders Ltd recognised revenue from contracts with customers of Rs 900 lakh. During the year it recognised an impairment loss of Rs 6 lakh on receivables from customer contracts under Ind AS 109 and Rs 4 lakh on a loan given to a supplier. Neither is presented separately in the statement of profit and loss. What must Kaveri disclose under paragraph 113(b) of Ind AS 115?

Kaveri must disclose the Rs 6 lakh impairment loss on receivables from customer contracts separately from the Rs 4 lakh loss on the supplier loan. Paragraph 113(b) requires impairment on customer-contract receivables and contract assets to be shown apart from impairment on other contracts.

  1. AImpairment losses of Rs 10 lakh as one combined figure
  2. BImpairment losses of Rs 6 lakh on customer-contract receivables, disclosed separately from impairment losses on other contracts such as the Rs 4 lakhCorrect
  3. CImpairment losses of Rs 4 lakh only, because supplier loans are the main credit exposure
  4. DNo disclosure, because impairment under Ind AS 109 is outside Ind AS 115

Explanation

Paragraph 113(b) requires disclosure of impairment losses recognised under Ind AS 109 on receivables or contract assets arising from contracts with customers, separately from impairment losses from other contracts. So Rs 6 lakh is disclosed on its own and the Rs 4 lakh supplier loan loss is kept apart. Combining them to Rs 10 lakh ignores the separation requirement.

Did you get it right without looking?

One question tells you little. A timed set on Revenue from Contracts with Customers (Ind AS 115) shows your real accuracy, how long you take and where you lose marks.

Practise Revenue from Contracts with Customers (Ind AS 115)Free diagnostic mock

More Revenue from Contracts with Customers (Ind AS 115) questions