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

Veda Textiles Ltd supplies fabric to retail chains and also earns interest income on its surplus deposits. While preparing its financial statements, the finance head asks how the revenue from its customer contracts should be shown. As per Ind AS 115, unless the amounts are presented separately in the statement of profit and loss under other Standards, which disclosure is required?

Ind AS 115 requires revenue recognised from contracts with customers to be disclosed separately from the entity's other sources of revenue, such as interest income. This is required for the reporting period unless the amounts are already presented separately in the statement of profit and loss under other Standards.

  1. ARevenue from contracts with customers shown separately from the entity's other sources of revenueCorrect
  2. BRevenue from contracts with customers combined with interest income into one total revenue figure
  3. CRevenue from contracts with customers disclosed only if it exceeds 10% of total income
  4. DRevenue from contracts with customers disclosed only in the accounting policy note without amounts

Explanation

Paragraph 113 requires an entity to disclose revenue recognised from contracts with customers separately from its other sources of revenue, unless presented separately in the statement of profit and loss under other Standards. Interest income is not revenue from contracts with customers, so combining the two is not permitted. No 10% threshold exists in this requirement.

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