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

Sundaram Textiles Ltd prepares its financial statements under Ind AS. In its annual report, the finance team proposes to show revenue from customer contracts and interest income on its treasury deposits as a single line, 'Revenue', without separate disclosure. Which statement is correct under Ind AS 115 disclosure requirements?

Revenue recognised from contracts with customers must be disclosed separately from the entity's other sources of revenue, such as interest income, unless it is already presented separately in the statement of profit and loss under other Standards. Merging them into one line does not meet Ind AS 115.

  1. ACombining is permitted because both are income earned in the ordinary course
  2. BRevenue from contracts with customers must be disclosed separately from the entity's other sources of revenue, unless presented separately in the statement of profit and loss under other StandardsCorrect
  3. COnly interest income needs separate disclosure; contract revenue may be merged with other revenue
  4. DSeparate disclosure is needed only if the interest income exceeds 10% of total revenue

Explanation

Ind AS 115 (para 113) requires revenue recognised from contracts with customers to be disclosed separately from other sources of revenue, unless presented separately in the statement of profit and loss under other Standards. No 10% threshold exists in this requirement, so the merged presentation is wrong.

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