📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Under Ind AS 115, a construction company enters into a

    contract to build a dam over 4 years. Revenue is recognized over time based on cost incurred to date. In year 2, 50% of the cost is incurred. How should the company recognize revenue?
    A Recognize all revenue at project completion Correct Answer Incorrect Answer
    B Recognize 50% of total contract revenue Correct Answer Incorrect Answer
    C Recognize only actual cash received Correct Answer Incorrect Answer
    D Defer revenue till 75% work is complete Correct Answer Incorrect Answer

    Solution

    Ind AS 115 follows the performance obligation method. If performance is satisfied over time, revenue is recognized proportionately. Since 50% cost is incurred, 50% revenue is recognized, assuming cost-to-cost method is used as the input method.

    Practice Next
    More Accounts Questions
    ask-question