S1: Ind AS 115 uses a five-step model for revenue recognition. S2: The five steps include identifying the contract, performance obligations, transaction price, allocating price, and recognizing revenue. Which statement(s) is/are correct?
Explanation:
Ind AS 115 prescribes a five-step model for revenue recognition. The steps are exactly as listed: identify contract, identify performance obligations, determine transaction price, allocate price, and recognize revenue when obligations are satisfied. Both are correct.
S1: Operating leverage measures the impact of fixed costs on operating profit. S2: Financial leverage measures the impact of fixed interest costs on earnings per share. Which statement(s) is/are correct?
Explanation:
Operating leverage arises from fixed operating costs and affects EBIT. Financial leverage arises from fixed financial charges (interest) and affects EPS. Both statements correctly define the respective leverages.
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