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CA Final · Financial Reporting · Accounting and Technology

Mahadev Pharma Ltd. uses a blockchain-based platform to record shipments to distributors. Each shipment hash is time-stamped and cannot be altered. For a sale recorded on the platform on 30 March when goods were dispatched under terms that transfer control to the customer only on delivery on 3 April, how should revenue be recognised under Ind AS 115 at year-end 31 March?

Revenue is not recognised in the year ended 31 March. Under Ind AS 115 revenue arises when control transfers, which happens on delivery on 3 April. The immutable blockchain entry only evidences dispatch and does not alter the timing of control transfer.

  1. ANot recognised in the year ended 31 March, because control has not passed, regardless of the platform entryCorrect
  2. BRecognised on 30 March because the immutable record proves the transaction
  3. CRecognised half in each year because the entry spans both periods
  4. DRecognised on 30 March as a contract asset at full invoice value

Explanation

Ind AS 115 recognises revenue when control transfers, which here occurs on delivery on 3 April. A tamper-proof record evidences the dispatch but does not change when control passes. Splitting revenue across periods or booking it early has no basis in the standard.

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