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

Which of the following statements correctly describes how Ind AS 115 differs from IFRS 15 regarding penalties in a contract with a customer?

Ind AS 115 amends paragraph 51 to exclude penalties from the examples of items that make consideration variable, and inserts paragraph 51AA to explain how penalties are accounted for. This differs from IFRS 15, where penalties appear in the paragraph 51 list.

  1. AParagraph 51 of Ind AS 115 lists penalties as an example of variable consideration, same as IFRS 15
  2. BInd AS 115 removes penalties from the examples in paragraph 51 and adds paragraph 51AA to explain their accounting treatmentCorrect
  3. CInd AS 115 ignores penalties entirely and leaves their treatment to Ind AS 37
  4. DInd AS 115 deletes paragraph 51 and replaces it with paragraph 109AA

Explanation

IFRS 15 paragraph 51 lists penalties among items causing consideration to vary. Ind AS 115 amends paragraph 51 to exclude penalties from that list and inserts paragraph 51AA to explain the accounting treatment of penalties. Paragraph 109AA relates to excise duty, not penalties, and paragraph 51 is not deleted.

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