Page 2 - 19. COMPILER QB - INDAS 115

INDAS – 115

REVENUE FROM CONTRACTS WITH CUSTOMER

(TOTAL NO. OF QUESTIONS – 29)

Index
S.No. Particulars Page No.

1 RTP Questions 19.1
2 MTP Questions 19.13
3 Past Exam Paper Questions 19.21

RTPs QUESTIONS

Q.1 (MAY 19 also in Oct. 19 MTP)

KK Ltd. runs a departmental store which awards 10 points for every purchase of Rs500 which can be
discounted by the customers for further shopping with the same merchant. Each point is redeemable on any
future purchases of KK Ltd.‖s products within 3 years. Value of each point is Rs0.50. During the accounting
period 2017-2018, the entity awarded 1,00,00,000 points to various customers of which 18,00,000 points
remained undiscounted (to be redeemed till 31st March, 2020). The management expects only 80% of the

remaining will be discounted in future.
The Company has approached your firm with the following queries and has asked you to suggest the
accounting treatment (Journal Entries) under the applicable Ind AS for these award points:
(a) How should the recognition be done for the sale of goods worth Rs. 10,00,000 on a particular day?
(b) How should the redemption transaction be recorded in the year 2017-2018? The Company has requested

you to present the sale of goods and redemption as an independent transaction. Total sales of the entity
is Rs. 5,000 lakhs.
(c) How much of the deferred revenue should be recognised at the year-end (2017-2018) because of the
estimation that only 80% of the outstanding points will be redeemed?
(d) In the next year 2018-2019, 60% of the outstanding points were discounted Balance 40% of the

outstanding points of 2017-2018 still remained outstanding. How much of the deferred revenue should the
merchant recognize in the year 2018-2019 and what will be the amount of balance deferred revenue?
(e) How much revenue will the merchant recognize in the year 2019-2020, if 3,00,000 points are redeemed in
the year 2019-2020?

19.1