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Under Ind AS 115, the CORE PRINCIPLE for recognizing revenue is to recognize revenue:
AOn a pro-rata basis over the contract period irrespective of actual performance
BWhen the risks and rewards of ownership in the goods are transferred to the customer
CTo depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled
DWhen cash is collected from the customer for the goods or services
Answer & Solution
Correct answer: C. To depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled
Ind AS 115's core principle is a consideration-and-transfer model. Cash receipt timing is irrelevant; the older Ind AS 18 risk-and-reward concept is superseded; pro-rata recognition is not the rule unless it happens to coincide with performance over time.
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