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

Vihaan Textiles Ltd reports under Ind AS. In its financial statements for the year, it earned revenue from sale of fabrics to customers under contracts and also earned interest on fixed deposits. Under Ind AS 115, how should the revenue from contracts with customers be disclosed?

Revenue from contracts with customers must be disclosed separately from the entity's other sources of revenue, such as interest on deposits, unless it is already presented separately in the statement of profit and loss under other Standards. Combining the items or applying a percentage threshold is not what paragraph 113 requires.

  1. AMerged with interest income, as both are revenue items
  2. BDisclosed separately from its other sources of revenue, unless presented separately in the statement of profit and loss under other StandardsCorrect
  3. CDisclosed only in the notes on related parties
  4. DDisclosed only if it exceeds 10% of total income

Explanation

Paragraph 113 requires an entity to disclose revenue recognised from contracts with customers separately from its other sources of revenue, unless it is presented separately in the statement of profit and loss under other Standards. Interest on deposits is not revenue from a contract with a customer, so merging the two is wrong. No 10% threshold exists in the paragraph.

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