Skip to content

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

Under paragraph 113(b) of Ind AS 115, Kaveri Infra Ltd recognised Rs 12 lakh impairment on trade receivables from customer contracts and Rs 5 lakh impairment on a loan to a supplier. What must be disclosed?

Paragraph 113(b) requires impairment losses on receivables or contract assets arising from customer contracts to be disclosed separately from impairment losses on other contracts. Kaveri must therefore show Rs 12 lakh separately from the Rs 5 lakh, not combined or netted.

  1. AOnly a combined impairment of Rs 17 lakh
  2. BImpairment of Rs 12 lakh on customer-contract receivables or contract assets, disclosed separately from the Rs 5 lakh impairment from other contractsCorrect
  3. CImpairment of Rs 7 lakh, being the net of the two amounts
  4. DNo disclosure, because impairment is covered only by revenue disclosures

Explanation

Paragraph 113(b) requires impairment losses recognised under Ind AS 109 on receivables or contract assets arising from contracts with customers to be disclosed separately from impairment losses on other contracts. So Rs 12 lakh is shown separately from the Rs 5 lakh. Combining (Rs 17 lakh) or netting (Rs 7 lakh) breaches the separation requirement.

Did you get it right without looking?

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

Practise Revenue from Contracts with Customers (Ind AS 115)Free diagnostic mock

More Revenue from Contracts with Customers (Ind AS 115) questions