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Question

IND AS 115 prescribes a 5-step model for recognition of revenue, identify the correct sequence of the following steps given below:

                  I.    Identify the performance obligations in the contract

                 II.    Recognize revenue when (or as) the entity satisfies its performance obligations.

               III.    Determine the transaction price

              IV.    Allocate the transaction price to the performance obligations in the contract

                V.    Identify the contract with the customer

A I, III, II, IV, V Correct Answer Incorrect Answer
B III, V, IV, II, I Correct Answer Incorrect Answer
C III, V, I, II, IV Correct Answer Incorrect Answer
D V, I, III, IV, II Correct Answer Incorrect Answer

Solution

IND AS 115 provides a 5-step model for recognizing revenue from contracts with customers. To achieve the core principle, an entity should apply the following five-step model: Step 1: Identify the contract with the customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies its performance obligations

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