Ind As 115 - Revenue from Contract with Customers

steps
I Identify contract 4 Identify PO 3 DetermineTransaction Price

4 AllocateTrp to P o 5 Recognise revenue when P o satisfies

I identity contract Agreement betatwoon more parties thatcreates enforceable nights

and obligation contract exist if all below criteria satisfies

it all parties approved ii identify each panties rights regarding gls iiit identity
payment femme ir commercial substance r prob that entity will collect subs all consideration
Enact intentionand
ability
If Contmeetdonot exist entity can recognise revenue if
i Gfstod and no remaining obligation consideration received and nonrefundable
ii contract terminated and no butthen obligation consideration Received is non refundable

It Identifying Performanceobligation

If multiple oils promised in single contract identify whether more ital in Éo

915 one distinct it 7 I customer canbenefit from on together with other
all on its own
readily available resources
Glssoldseparately on customer already obtained fromentity on inothertrans
ii separately identifiable from other Promises in the contract
itsignificant Integration servicenot provided ii one Gls donot significantly modify
on customise other Gls iii NotHighly interdependent on interrelated

Additional Points

1 Customer option
for Add Gls4loyaltypoints Rewards Treat a separate p o and allocate
Tmans Price in theratio of standalone price
2 Consignment Arrangement Indicators to evaluate whether consignmentarrangement on not
e Product controlled byEntity untill sale an specified period expires Ii Entity abletorequire
return an transfer to another dealer iii Nounconditional obligation for dealer to pay
 Revenue notrecognised bon consignment arrangement because control notyet transferred
3 PrincipalNfsagent consideration

if Po is to Provide Gls itself principal

Revenue
Mccoy is the Expected Gross Amount
arrangeanother Pantyto ProvideGls Agent Revenue
Mccoy is the NetAmount
FesCommission
Indicator that entity is principal
d Entityis Primarily responsible for fulfilling contract ii Entity has inventory risk
iii entity has discretion in establishing prices born Gls

4 Non Refundable upfront bees GEf club membership joining fees

If feel received medals to specific Glstod Revenue Recognised bon Amount received
if bees received donot relate to 415 account he advance payment for futureGls

I Determining Transaction Price

Consider Effects of Ii Variableconsideration ii significant Financing component
iii noncashConsideration in consideration Payable to customer
include in tip performance criteria
lilvariableconsideration if entity expects to achieve
Methods
it Expected valuemethod large no of contracts with similar characteristics
7
ii mostnicely amount only two possibleoutcomes either Achieve performance Bonus onnoty
AteachRPEnd Entity mealselse v C and update Estimated T P I Refer911327
AdditionalPoints

ilRefund liabilities t Recognise

if expects to refund some amount of consideration received
It is updated at each RP End on cumulative catch up Basis
iil Salewith a right to return 7 Substanceis
of consignment sale consignment Amnangement

Inother cases Recognise Revenue excl products returnable refund liability and Assets

iiit Restocking bee ton hoods returnable included in t p andnews Revenue whencontrol transfers
Repackaging shipping on Reselling fees
in warranties

Assurance
type y not separatePO I RecogniseFullRevenue and makeprovision as pentha a 37
Servicetype 1 Account as separatePO and allocate portion of tin to that Po
 ii significant Financing component

customer Pays before entity customer loan on after entity Entity loaf performs its
obligation The objective is to recognise revenue at cash Price Equivalent Lie consideration
received on receivable is adjusted using market interest rates

Financing component recognised separately as Int Exp on Int Income using EIR

Overriding provision specifies that contract would nothave s f c if

I customer at discretion paid in Advance His sales based royalty ill Financing

comp aisle for reason other than Finance hi.e toprotectentity on customer

Iii17Noncash Consideration Shames Equipment etc

To determine T P measure N cc at its Fainvalue if notdeterminable then measure

TP WMit standalone selling price

of Gls transferred
subsequently if Fainvalue of N e c voice because ofits form t Do not Adjust T P

If Customer Provided Gill and controlfood to Entity 7 include in tip at FainvalueofM c c

inconsideration Payabletocustomer by Entity 4Ef Slotting bees PriceProtection Co op AdvtAgency

Payment
by Entity not bornany distinct oils reduced from T P
Payment byEntity bom distinct 415 consideration exceeds Fainvalue
of915 received such
Excess reduced bmom T P 4if cons donotexceed Fainvalue then Notreducedfrom T P

II Allocating Transaction Price to d o tionateBas

discount't
on a relative standAlone PriceBasis exceptpom moeating

Use observable price if available otherwise estimate using suitable methods

Adjusted market assessment 7 Pricecustomer willing to payInefenning competitorPricedjust

il Expected costplus margin 7 Costofsatisfying Po Add margin

till Residual approach usedonly if selling pricehighly variable Pricenotyetestablished

Previously notsold on standaloneBasis Residual Approach inappropriate if Allocated T P to
 Gls is outside Broad range of Estimates

subsequently if change in top then it will be meallocated to pro on the basis of Inception
date stand alone price of oils

I Satisfying Po
Entity recognises revenue when it satisfies PO by transferring GlsCanasset to customer
AnAsset is transferred when customer obtains control
ofAsset
Atcontmeet Inception Entity must determine whether control fool over a period oftime

on at a point in time An Entity transfers control oven time if

customer simultaneously receives benefit as entity penforme Asset which customer

control is created on enhanced as entity performs iii assetdo nothavealternative

use and Entity has right to payment ton performance completed to date cost t manging

it control fad over time Revenue recognised proportionately over a period of time
n at a point in time Revenuerecognised
at a pointwhen 1001 controlfood
Methods
of measuring progress when P o Satisfies over time
output method 7 Based on measurement value Lie Fainvalue of Gls tbd till date
Inputmethod 7 Based on Entity's efforts on Inputs i e Expense incurred X 100
4 Wasted material labour and other Resources Total cost
ignored

when cost incurred notproportionate to Entity's progress recognise revenue to the

extent of cost incunned if 117 Goods do notrepresentdistinctP.o fit customer
Obtain control
of goods Iii cost of goods significant relative to total cost
in Entity procures goods from third Parties

Other Points

i Bill and Hod 7 Entity bills customer for a Pnoduet but retains physical possession

due to customer request In such case control is Efd if all below Criteriais met
Reason fan Bill Hold substantive fi productidentified separately he belonging to customer
iii Product needy bon Physicatransfer in NoAbility to use product on directto open customers
 if Control istransferred Entity recognises revenue forgoods Howevercustodial service provided
to customer is identified as separate PO and top allocated to Goods Efd custodial service

if controlnotemansbenned Revenue recognition is deferred untill control transferred

Contract cost

contract acquisition cost contract Fulfillment cost

Incremental cost to obtain a contractwhich costincurred inFulfilling contract

notincurred if contract notobtained IEG Equipment Software Designingcost othen 4157

EG bell commission upon signing contract PIE Intangible
contractassetasper
of meet
Ind a 161 Ind As 115
g IndAs381
pmoffice over
suchcostcapitalised and A
mortised ovencontractterm
contract team

Legalbees for drafting Arrangementterms travel Exp on batteries bon pitching on working
on new clients etc one incummed even if contract notobtained and changed as Exp in PIL

Repurchase Agreements 4sells Assets t promises option to Repurchase

Forward call option

16 R PP Y S P thenFinancing Ammangement if RPP L 5P leases as pen Ind As 116
D Bank All 4 InterestEpp Bank Me Advanceleasement

TO Coan Tosecurity Deposit To RentalIncome

To Loan To Adv leasement
3 loan l M securityDeposit on security Deposit
to Bank
refinish gopan TORevenue
to
Ranchall optionlapses ranchall optionlapses

Putoption hcustomer has aright to PutbackAsset

If Significant EconomicIncentive for customer if No significant Economicincentive to putback
to Put Back Alling on sale with a right toreturn
M
R P P 7 SP Financing ammangement

RP P L SP ceases a pen theas116 f pp Gon Entity

Customer has significant Economic Incentive if PutbackPrice morethan Expected marketvalue
 Service concession Annangement Roads Bridges Tunnels Hospitals Airports

Consider given by Granton Gout to an openatom Entity may be nights to

A Financial Asset Interminable fixedAmount AnIntangible asset NoFixedon DeterminableAnt

contractual right to deceive cash on Another FA licence to change user of public service
Tonna Journal

DFinancialAsset 2 Costofconst I IntangibleAsset 2 Costofconsya

to const Revenue To Bank To Revenue To Bank
9 Financial Asset 4 Financial Mkt 3 Amortization Exp 4 Bank
To Financeincome to Revenue To IntangibleAsset To Revenue
5 Bank Entire
To FinancialAsset
In both cases consideration received on receivable recognised initially at FainValue

Contract Modification Partially terminating Extending contractteam adding Gls Reducingprice

ilseparatecontract Adding new distinct Gls and increase in pricereflects standalone s P

ill nota separate contract
16 Remaining Gls distinctfrom 41 Efd if Remaining Gls not distinct and forms
before modification Pantof single pro

mentoring cumulative
Allocate T P to outstanding catch up Basis
Performanceobligation 4Prospectively

Combining contracts Two on more contracts accounted as single Po if any conditions met
lil negotiated as a package fi consideration Paid in Onecontractdepends on price on
performance
ofomen contmeet Liiil Gls promised in a contractone single PO

Contract team contractual period where Parties have present enforceablerights obligations