Under Ind AS 115, 'Variable Consideration' (like bonuses or penalties) can only be included in the transaction price if:
A. It is highly probable that a significant reversal in the amount of cumulative revenue will not occur.
B. The customer has explicitly agreed to the variable amount in the contract.
C. The entity has received the cash for the variable consideration.
D. The performance obligation is fully satisfied.
Answer: Option A
Solution (By JKSSB Mock Tests)
Ind AS 115 imposes a constraint on variable consideration. It can only be included in the transaction price to the extent that it is highly probable that a significant reversal of revenue will not occur when the uncertainty is resolved.
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