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

Manas Foods Ltd sells packaged goods. Its statement of profit and loss for the year shows revenue from contracts with customers of ₹480 lakh, which includes excise duty of ₹30 lakh. As per the Indian amendment to Ind AS 115, how should the excise duty be reported?

Manas Foods must present separately, in the statement of profit and loss, the ₹30 lakh of excise duty that is included in its ₹480 lakh revenue. This follows paragraph 109AA inserted into Ind AS 115. Silent netting, or treating it only as a note, would not comply.

  1. ADeduct it from revenue and not disclose it anywhere
  2. BDisclose it only in the notes as a contingent liability
  3. CPresent separately the amount of excise duty included in the revenue recognised in the statement of profit and lossCorrect
  4. DShow it as part of other expenses and reduce revenue to ₹450 lakh without any separate presentation

Explanation

Paragraph 109AA, inserted in Ind AS 115, requires an entity to present separately the amount of excise duty included in the revenue recognised in the statement of profit and loss. So ₹30 lakh must be separately presented, within the ₹480 lakh of revenue. Netting it silently or hiding it would breach that requirement.

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