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

Sundaram Beverages Ltd reports the following for the year for contracts with customers: sales of goods Rs 480 lakh, which include excise duty of Rs 40 lakh, and interest income on fixed deposits Rs 12 lakh. Based on the disclosure requirements in Ind AS 115 (including the Indian addition in paragraph 109AA), which presentation is correct?

Contract revenue must be disclosed separately from other revenue such as the Rs 12 lakh interest income, and the Rs 40 lakh excise duty included in revenue must be presented separately in the statement of profit and loss, as required by paragraph 109AA of Ind AS 115.

  1. ADisclose revenue from contracts with customers separately from other sources of revenue, and present separately the Rs 40 lakh excise duty included in the revenue recognisedCorrect
  2. BNet the excise duty against revenue and disclose only Rs 440 lakh, with no separate presentation of the duty
  3. CCombine the Rs 12 lakh interest income with contract revenue to show Rs 492 lakh as a single revenue figure
  4. DDisclose the excise duty only in the notes on tax expense, not in the statement of profit and loss

Explanation

Paragraph 113(a) requires revenue from contracts with customers to be disclosed separately from other sources of revenue, so the Rs 12 lakh interest is kept apart. Paragraph 109AA, inserted in Ind AS 115, requires separate presentation of the excise duty included in revenue recognised in the statement of profit and loss. Netting the duty (Rs 440 lakh) or merging the interest would breach these requirements.

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