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

Which statement correctly describes how Ind AS 115 differs from IFRS 15 regarding the variable consideration paragraph and penalties?

Ind AS 115 amends paragraph 51 to exclude penalties from the examples of why consideration may vary, unlike IFRS 15, and inserts paragraph 51AA to explain how penalties are to be accounted for.

  1. AParagraph 51 of Ind AS 115 excludes 'penalties' from the examples of why consideration may vary, and paragraph 51AA is inserted to explain the accounting treatment of penaltiesCorrect
  2. BParagraph 51 of Ind AS 115 adds penalties as an extra example of variable consideration beyond IFRS 15
  3. CInd AS 115 is silent on penalties and follows IFRS 15 paragraph 51 unchanged
  4. DParagraph 51AA removes the concept of variable consideration entirely from Ind AS 115

Explanation

IFRS 15 paragraph 51 lists penalties among the reasons consideration can vary. Ind AS 115 amends paragraph 51 to remove penalties from that list and inserts paragraph 51AA to explain their accounting treatment. The option claiming penalties were added reverses the actual change.

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