New Cracking SEBI General in 60 Days - Possible or Not?
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Question

According to IND AS 115, when can revenue be recognized? 

A When the performance obligation is satisfied Correct Answer Incorrect Answer
B When the payment is received Correct Answer Incorrect Answer
C When the contract is signed Correct Answer Incorrect Answer
D When the goods are shipped Correct Answer Incorrect Answer
E When the customer is invoiced Correct Answer Incorrect Answer

Solution

When the performance obligation is satisfied. Under IND AS 115, revenue should be recognized when the performance obligation is satisfied. A performance obligation is defined as a promise to transfer a good or service to a customer. The satisfaction of a performance obligation occurs when control of the promised good or service is transferred to the customer. This means that the customer has the ability to use and benefit from the good or service and also bears the risks and rewards associated with ownership of the good or service.

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