Skip to content

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

Sagar Pharma Ltd sells medicines to distributors on credit. During the year it recognised an impairment loss under Ind AS 109 on trade receivables arising from contracts with customers, and also on a loan given to a supplier. How should the impairment losses be disclosed under Ind AS 115 (paragraph 113), unless presented separately in the statement of profit and loss?

Sagar Pharma should disclose the impairment loss on receivables or contract assets arising from customer contracts separately from impairment losses on other contracts, such as the supplier loan, because paragraph 113(b) of Ind AS 115 requires this separate disclosure.

  1. AImpairment on customer receivables disclosed separately from impairment losses from other contractsCorrect
  2. BBoth impairment losses shown as one combined amount
  3. CImpairment on customer receivables shown only as a deduction from revenue with no separate disclosure
  4. DImpairment losses disclosed only when they exceed the revenue of the year

Explanation

Paragraph 113(b) requires any impairment losses recognised under Ind AS 109 on receivables or contract assets arising from contracts with customers to be disclosed separately from impairment losses from other contracts. The supplier loan is not a contract with a customer, so combining them is incorrect.

Did you get it right without looking?

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

Practise Ind AS 115 Revenue from Contracts with CustomersFree diagnostic mock

More Ind AS 115 Revenue from Contracts with Customers questions