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When a performance obligation is satisfied, Ind AS 115 requires the entity to recognise revenue at:
AThe transaction price allocated to that performance obligation, excluding any constrained variable consideration
BThe amount of cash actually received from the customer at that date
CThe fair value of the good or service in the open market
DOnly after both parties have fully discharged all their contractual obligations
Answer & Solution
Correct answer: A. The transaction price allocated to that performance obligation, excluding any constrained variable consideration
Revenue under Ind AS 115 = transaction price allocated to the satisfied PO, with constrained variable consideration excluded (paras 56-58). Cash receipt, market fair value, and full mutual completion are not the recognition rules.
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