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

Which statement correctly describes how Ind AS 115 deals with penalties in determining the consideration, compared with IFRS 15?

Ind AS 115 removes penalties from the list of examples in paragraph 51 that cause consideration to vary, unlike IFRS 15, and adds paragraph 51AA to explain how penalties are accounted for. So the treatment differs from IFRS 15 in both the list and the added paragraph.

  1. AInd AS 115 retains penalties in the list of examples in paragraph 51 of items causing variable consideration, identical to IFRS 15
  2. BInd AS 115 excludes penalties from the examples in paragraph 51 and inserts paragraph 51AA to explain their accounting treatmentCorrect
  3. CInd AS 115 ignores penalties entirely and has no related paragraph
  4. DInd AS 115 treats penalties only as a disclosure matter under paragraph 113

Explanation

The comparison appendix states that paragraph 51 of IFRS 15 lists penalties as a reason consideration can vary, but Ind AS 115 amends paragraph 51 to exclude penalties and inserts paragraph 51AA to explain their treatment. The option claiming identical wording is therefore wrong.

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