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Under Ind AS 115, if the fair value of non-cash consideration (e.g., shares) received from a customer VARIES AFTER CONTRACT INCEPTION due to changes in the price of the share (i.e., due to its FORM), the entity:
ARe-measures the entire transaction price at each reporting date using current fair value
BReverses revenue to the extent of any decline in the share value
CDoes NOT adjust the transaction price for fair-value changes attributable to the form of the consideration
DAdjusts the transaction price each reporting period for FX-style fair-value movement
Answer & Solution
Correct answer: C. Does NOT adjust the transaction price for fair-value changes attributable to the form of the consideration
Para 66-69: if fair value of non-cash consideration changes after inception because of its FORM (e.g., share price movement), the entity does NOT adjust the transaction price for that change. Only changes attributable to reasons OTHER than form (e.g., changes due to the entity's performance) flow through the variable-consideration mechanism. The post-inception movement in equity-share value due to market gyration sits outside revenue.
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